Index of "1996 Country Commercial Guides"
Index of "Economic and Business Issues"
Electronic Research Collections Index
ERC Homepage

```

U.S. Department of State  
1996 India Country Commercial Guide  
Office of the Coordinator for Business Affairs  
  
  
  
                         1996 COUNTRY COMMERCIAL GUIDE  
                                     INDIA  
  
[This Country Commercial Guide (CCG) presents a comprehensive look at  
India's commercial environment through economic, political and market  
analyses.    
  
The CCG's were established by recommendation of the Trade Promotion  
Coordinating Committee (TPCC), a multi-agency task force, to consolidate  
various reporting documents prepared for the U.S. business community.   
Country Commercial Guides are prepared annually at U.S. Embassies  
through the combined efforts of several U.S. government agencies.  
  
Country Commercial Guides (CCG's) are available on the National Trade  
Data Bank on CD-ROM or through the Internet.  Please contact STAT-USA at  
1-800-STAT-USA for more information.  To locate CCG's via the Internet,  
please use the following world wide web address: WWW.STAT-USA.GOV.   
CCG's can also be ordered in hard copy or on diskette from the National  
Technical Information Service at 1-800-553-NTIS.]  
  
  
  
                         Table of Contents  
  
Chapter I.   Executive Summary   
  
Chapter II.  Economic Trends and Outlook  
   -- Major trends and outlook  
   -- Principal growth sectors   
   -- Government role in the economy   
   -- Balance of payments situation  
   -- Infrastructure  
  
Chapter III. Political Environment  
   -- Nature of political relationship with the United States  
   -- Major political issues affecting the business climate  
   -- Synopsis of political system, schedule for elections,  
      orientation of major political parties  
  
Chapter IV.  Marketing U.S. Products and Services  
   -- Distribution and sales channels  
   -- Use of agents and distributors; finding a partner  
   -- Franchising  
   -- Direct marketing  
   -- Joint ventures/licensing  
   -- Steps to establishing an office  
   -- Selling factors, techniques  
   -- Advertising and trade promotion   
   -- Pricing product  
   -- Sales service and customer support  
   -- Selling to the Government of India, state enterprises  
   -- Protecting your product from IPR infringement  
   -- Need for a local attorney  
  
Chapter V.  Leading Sectors for U.S. Exports and Investment  
   -- Best prospects for non-agricultural goods and services   
   -- Best prospects for agricultural products   
   -- Significant investment opportunities   
  
Chapter VI.  Trade Regulations and Standards  
   -- Trade barriers, tariffs, non-tariff barriers, import taxes  
   -- Customs valuation  
   -- Import licenses  
   -- Export controls  
   -- Import/export documentation  
   -- Temporary entry  
   -- Labeling, marking requirements  
   -- Prohibited imports  
   -- Standards   
   -- Free trade zones, warehouses  
   -- Special import provisions  
   -- Membership in free trade arrangements   
  
Chapter VII.  Investment Climate  
   -- Openness to foreign investment, investment barriers  
   -- Conversion and transfer policies  
   -- Expropriation and compensation  
   -- Dispute settlement  
   -- Political violence   
   -- Performance requirements, incentives  
   -- Right to private ownership and establishment  
   -- Protection of property rights  
   -- Regulatory system, laws and procedures  
   -- Bilateral investment agreements  
   -- OPIC and other investment insurance programs  
   -- Labor  
   -- Foreign trade zones, free ports   
   -- Capital outflow policy   
   -- Major foreign investors  
  
Chapter VIII.  Trade and Project Financing  
   -- Brief description of the banking system  
   -- Foreign exchange controls affecting trading  
   -- General financing availability  
   -- How to finance exports, methods of payment  
   -- Types of available export financing and insurance   
   -- Project financing available, lending from multilateral  
      institutions and types of projects supported  
   -- List of banks with correspondent U.S. banking arrangements  
  
Chapter IX.  Business Travel  
   -- Business customs  
   -- Travel advisory and visas  
   -- Holidays  
   -- Business infrastructure   
  
Chapter X.  Appendices  
   A.  Country data  
   B.  Domestic economy  
   C.  Trade  
   D.  Investment statistics  
   E.  U.S. and India points of contact for U.S. business  
   F.  Market research  
   G.  Trade event schedule  
  
  
  
                     Chapter I.  Executive Summary   
  
Better relations between the U.S. and India after the end of the Cold  
War were highlighted by Prime Minister P.V. Narasimha Rao's official  
visit to the United States in May 1994.  The year that followed was a  
watershed in bilateral relations.  First Lady Hillary Rodham Clinton,  
U.S. Energy Secretary Hazel O'Leary, Defense Secretary William Perry,  
Commerce Secretary Ron Brown, Treasury Secretary Robert Rubin, Senator  
John Kerry, Governor William Weld, and a host of other senior officials  
all visited India.  The positive trend of these official contacts was  
paralleled by greatly increased exchanges and communications between the  
private sectors of both countries.  
  
All areas of our relationship -- bilateral defense cooperation, our  
global policy dialogue, scientific and educational exchange, and  
especially trade, investment, and business -- expanded.  U.S. business  
delegations accompanied both of Energy Secretary O'Leary's visits to  
India during the 1994-95 year.  Commerce Secretary Brown led a group of  
24 Chief Executive Officers of major U.S. corporations representing  
aviation, power generation, telecommunications, insurance, textiles, and  
other priority sectors.  Senator Kerry and Governor Weld also brought  
business delegations with them.  
  
The United States is India's leading foreign investor and largest  
trading partner.  India's Foreign Investment Promotion Board approved  
U.S. requests for new investments valued at USD 1.1 billion in 1994.   
Bilateral trade exceeded USD 7.5 billion during the year, with India's  
surplus growing to USD 3.0 billion.  In 1993, bilateral trade was USD  
7.3 billion and India's trade surplus amounted to USD 1.8 billion.  U.S.  
firms entered the Indian market both on their own and with financially  
strong Indian partners.  The growth of the American business communities  
in India's major cities, as well as the increased traffic of business  
travelers, have been notable.  Indo-American joint ventures are  
announced frequently, especially for the new commercial opportunities  
opened by India's economic reforms in such areas as information  
technology and telecommunications.  
  
The U.S. has identified India as one of the ten "Big, Emerging Markets"  
where future growth rates are poised to exceed those in the developed  
markets.  Many U.S. corporations share the view of India's potential for  
business expansion.  Jack Welch, chairman and CEO of General Electric,  
and a spokesman for American business, has identified India as one of  
his corporation's three most important national markets for strategic  
growth.  Our governments have agreed to revive the U.S.-India  
Economic/Commercial Subcommission and to start a U.S.-India Commercial  
Alliance.  Both groups integrate private sector business executives'  
views into their deliberations.  These framework organizations will  
enable all parties to share views, provide feedback on government  
policies, and participate in actions aimed at expanding mutually- 
profitable trade and investment.    
  
India will hold general elections before June 1996, with many predicting  
a spring date.  Since India's reforms began in 1991, in the midst of a  
foreign exchange shortage and an economic crisis, a broad consensus in  
favor of the free market model of economic development has emerged  
across a wide spectrum of India's political parties.  From the Communist  
Chief Minister of West Bengal on the left to the Shiv Sena [Hindu  
nationalist] Chief Minister of Maharashtra on the right, foreign  
investment and increased business are welcomed.  Within this broad  
consensus in favor of economic reform, there is also partisan political  
competition to win votes and appeal to nationalist and populist  
sentiments.  Few of the 70 percent of Indians living in villages have  
felt immediate benefits of the reforms in their daily lives.  Winning  
their votes is also part of the democratic process in India.   
Politicians challenging incumbents have criticized them for failing to  
bring the benefits of reform to the poorest and most vulnerable social  
groups.  Electoral setbacks in state elections in the south and west  
during the year have affected the confidence and internal cohesion of  
the Congress(I) party, while it has heightened the expectations of  
regional and other opposition parties for electoral gains.   
  
As new state governments review investment approvals granted by their  
political foes in former administration, U.S. firms engaged in major  
project investments find themselves under renewed scrutiny by the  
political system and a free and activist press.  This has introduced an  
unwelcome element of uncertainty into the assessments of India's  
opportunities by foreign investors.    
  
India's economic reform agenda is unfinished.  Its economic reform  
process can only proceed at a pace judged politically sustainable by the  
political leaders of India.  We believe that the domestic political  
process will command the attention of ranking Congress(I) leaders and  
senior officials as the campaign for the next general election begins,  
distracting them from active management of the reform process until  
after the general election.  Unfinished business includes financial  
sector reforms, including insurance, privatization of public enterprises  
(public sector undertakings), and additional changes in labor and  
company law.  
  
Our long term optimism about India's market, however, is unshaken by  
these temporary political vicissitudes.  India has a dynamic private  
sector, a need for capital and technology that cannot be met  
domestically, a growing middle class hungry for opportunity, and a  
consensus favoring opening India to foreign trade and investment.  Since  
1991, the government has welcomed foreign direct investment as a way to  
reach its national economic development goals.  This is an opportunity  
for U.S. business.  India has demonstrated a fundamental commitment to  
the democratic process, which has served as a crucible to forge one  
India from many different groups.  We recognize that the process of  
economic reform is not smooth, straight, regular and predictable.  We  
believe serious U.S. investors and businesses who are able to accept the  
uncertainties with patience and adaptability will be rewarded by  
commercial success.    
  
  
  
                  Chapter II.  Economic Trends and Outlook  
  
India's economic performance in 1994-95, while mixed, was generally  
encouraging.  India's real gross domestic product (GDP) grew by 5.3  
percent in the Indian fiscal year (IFY) ended March 31, 1995.  The 8.0  
percent growth in industrial output and a 2.0 percent increase in  
agricultural production supported this positive trend.  India's 1994-95  
trade deficit of USD 2.2 billion remains manageable with foreign  
exchange reserves of USD 21.1 billion, representing some 8 months of  
imports.  From less than USD 1.0 billion in July 1991, India's foreign  
exchange reserves expanded to USD 21.1 billion at the end of March 1995.   
Strong capital inflows from foreign institutional investors during the  
first half of IFY 1994-95, as well as new foreign direct investments,  
added to India's asset base while also increasing the money supply.  As  
of June 1995, Moody's Investor Service rates India's credit at Baa3  
(lowest rank of investment grade) and Standard & Poors Corp. rates it at  
BB+ (highest rank of speculative grade).    
  
India's external debt ranks third in the developing world, behind Brazil  
and Mexico.  Its external debt has stabilized at about USD 90 billion,  
and 47 percent of this is at concessional aid rates of interest.  The  
Government's expenditures exceeded revenues again in 1994-95, when the  
deficit was equivalent to 6.7 percent of GDP.  The Government deficit  
was 7.7 percent of GDP in IFY 1993-94, so efforts to reduce expenditures  
and increase revenues did produce some improvement during IFY 1994-95.   
Inflation, measured by the Consumer Price Index (CPI) increased to 10.6  
percent for IFY 1994-95.  To combat the double-digit inflation rate, the  
Reserve Bank of India (RBI) restricted credit and set higher reserve  
limits in April 1995.  By June the consumer price index (CPI) inflation  
was under 9 percent, but new investment in private sector capital  
spending had also fallen.  Since August 1994, the "Sensitive Index" of  
the Bombay Stock Exchange has steadily fallen, reflecting pessimistic  
investor sentiment and a lack of liquidity in the market.  
  
The ruling Congress (I) party suffered defeats in key state elections in  
February and March, as well as internal dissension.  As a result of  
political uncertainty and upcoming general elections, the pace of  
economic reform has slackened.  The 1995/96 budget announced in March  
continued the tariff and tax reforms of previous years, cutting the peak  
tariffs from 65 percent to 50 percent and reducing excise taxes.    
  
The government also proposed the creation of an insurance regulatory  
authority in anticipation of private sector participation, but stopped  
short of opening it to the private sector.  Government disinvestment of  
public sector firms has been slow due to opposition from vested  
interests and poor stock market conditions.  The government announced  
new anti-poverty measures, especially for rural areas.  
  
While the pace has slackened, all major parties continue to recognize  
economic reform is desirable and there are no credible efforts to  
reverse measures already adopted.  Reforms have become more entrenched  
as Indian states vie to attract foreign investment.    
  
Construction work has begun on the Enron-led USD 925 million power  
project at Dabhol in Maharashtra, although the new Maharashtra  
government has undertaken a highly publicized review of the project.   
The fate of the project is being closely watched in India and abroad as  
a bellwether for India's reliability as a foreign investment  
destination.  Elsewhere, the Union Government issued clarifications on  
basic and cellular telecom tenders in May, improving revenue sharing and  
other aspects of service for private companies.  Thirty-three companies  
bid on contracts for cellular services.  Results of the 16 bids from  
domestic and foreign consortia for basic service market areas are  
expected in September.   
  
The U.S. remains India's largest trade and investment partner.  High- 
level official and business visits in both directions have strengthened  
bilateral relations.  U.S. visits to India during the first half of 1995  
include First Lady Hillary Clinton, Commerce Secretary Brown, Energy  
Secretary O'Leary, Defense Secretary Perry and Treasury Secretary Rubin.   
Economic relations also got a boost from the creation of the U.S.-India  
Commercial Alliance to promote deepening economic ties in infrastructure  
and food processing and the revitalized U.S. - India Economic/Commercial  
Subcommission to strengthen policy dialogue.     
  
THE CURRENT SITUATION  
  
The pace of Indian economic reforms has slowed in the face of poor  
performance of the ruling Congress (I) party in key state elections and  
preparations for general elections due within the next 10 months.  As a  
result, the government has opted for a cautious approach on new and  
potentially controversial reform measures.  However, incremental  
progress continues on reforms already announced.  In its 1995/96 budget  
introduced in March, the government continued the tariff and tax reforms  
of the previous four years, cutting peak tariffs from 65 percent to 50  
percent, reducing duties on a number of key machinery items and  
components of capital goods, electronics and chemical products.  The  
government also proposed a 5-year tax holiday for firms engaged in  
infrastructure projects such as roads, airports, ports and mass transit  
systems.  
  
Macroeconomic Developments:  Real GDP grew 5.3 percent in 1994/95, up  
from 4.3 percent the previous year, based on 8 percent growth in  
industrial output and another good agricultural harvest.  Embassy  
projects GDP growth at about 5.5 percent in 1995/96.  India's gross  
domestic saving rate has declined from a high of 23 percent in 1991/92  
to 20.2 percent in 1993/94 due to persistently high budget deficit and  
government dissaving.  India's savings rate is well below those achieved  
in some other Asian countries.  Despite its low per capita income of USD  
320, India offers a significant market for consumer goods, with a middle  
class estimated to range between 150 to 250 million  
  
Inflation was in double digits for most of the 1994/95 fiscal year  
(which ended March 31).  Shortages of essential commodities such as  
edible oil and cotton contributed to inflation, as did earlier increases  
in retail prices of foodgrains, and rapid growth of the money supply.   
Government efforts to import essential commodities such as sugar, edible  
oils, and cotton failed to have any appreciable impact on price  
situation.  However, tightening of the monetary policy in April 1995,  
anticipation of another good agricultural crop and continuing import of  
edible oil helped in bringing inflation down under 9 percent at mid- 
year.  The government's goal is to bring inflation down to about 8  
percent this year and to 5 percent or less in following years.  
  
Foreign Exchange Reserves: India's international reserves have risen  
sharply from less than USD 1 billion in July 1991.  Reserves rose from  
USD 15.5 billion in March 1994 to USD 21.1 billion in March 1995.   
India's reserves may drop slightly during the current fiscal year due to  
smaller capital inflows from foreign institutional investors, and a  
large trade deficit.   
  
High Fiscal Deficit:  The government budget deficit for 1994/95 was 6.7  
percent of GDP, overshooting the government's target of 6 percent.   
Under its agreement with the Reserve Bank of India (RBI), the government  
is phasing out "monetization of deficits," and as a result is  
increasingly borrowing at prevailing market interest rates.  As a  
result, the government's borrowing needs have created upward pressure on  
rates, and significantly reduced liquidity in the markets.  In 1994/95  
government's interest payments absorbed nearly 50 percent of all its tax  
receipts, a continuing concern for policy makers.  The 1995/96 budget  
projects the fiscal deficit at 5.5 percent, but containing the deficit  
at this level is not realistic in an election year.  
  
A Record Foodgrains Output:  India's foodgrains output in 1994/95 peaked  
at 186 million metric tons (MT), following the seventh normal monsoon in  
a row.  Increases in production in recent years have resulted in higher  
government food stocks (26.4 million MT on April 1, 1995).  As stocks  
are well above target level (15 million MT) the government has decided  
to export 4.5 million MT of rice and wheat in 1995/96.  While oilseed  
output remained stagnant, output of other crops such as cotton and  
sugarcane improved substantially.    
  
Sharp Growth in Industrial Output:  Responding to economic  
liberalization, industrial growth bounced back in 1994/95 with an  
estimated growth rate of 8 percent, following a 3-year period of  
industrial stagnation.  Capital goods, commercial vehicles, cement, and  
steel performed particularly well.  Output declined in other industries,  
such as railway freight cars, jute goods, and machine tools.  Prospects  
for 1995/96 appear promising with projected growth of 10 percent.   
Several state governments have taken new policy initiatives to attract  
foreign investment, including the establishment of a single window  
clearance.  Chief Ministers from several states, including West Bengal  
and Maharashtra, visited the U.S. in June with business delegations to  
promote investment in their states.  
  
Tight Monetary Policy:  Earlier sharp increases in India's money supply  
(M3 rose 21.2 percent in 1994/95) and commercial bank loans to industry  
(up 28.6 percent) have fueled concerns about inflation.  On April 17,  
1995, the RBI tightened monetary policy, raising the maximum term  
deposit interest rate one point to 12 percent and allowing commercial  
banks to increase their prime lending rate to 15.5 percent.  The RBI  
also directed commercial banks to stop bridge loans to firms issuing new  
shares and increased interest rates on post-shipment loans denominated  
in dollars.  Reserve requirements were not changed.  Based on these  
changes in monetary policy, the RBI anticipates M3 growth at 15.5  
percent in 1995/96 and hopes to contain inflation at around 8 percent.  
  
Banking Sector:  India's government-owned banks dominate the market, but  
most have not been strong performers.  The government is working with  
these public sector banks on restructuring to improve profitability.   
The World Bank recently approved a loan designed to aid in this process.   
The Indian Government has also made a policy decision to allow these  
banks to sell additional shares to the public, thus reducing the  
government's ownership stake.  However, the government's holding may not  
fall below 51 percent of the paid-up capital.  
  
The RBI has granted operating approval to a total of 11 privately owned  
domestic banks; of these 6 have commenced banking business.  Foreign  
banks increased the number of branches from 140 in June 1991 to 150 in  
December 1994.  Entry of foreign banks is based on reciprocity, and  
economic and political bilateral relations.  An inter-departmental  
committee approves applications for the entry and expansion of existing  
branches of foreign banks.  Foreign banks were required to achieve an 8  
percent capital adequacy norm by March 1993, while Indian banks with  
overseas branches had until March 1995 to meet that target.  All other  
banks have until March 1996.  
  
Capital Market Development:  The importance of the capital market has  
increased substantially in India since economic reform began in 1991.   
Indian firms raised USD 12.9 billion in the primary market in 1994,  
continuing a shift from debt to equity financing.  However, despite  
record corporate profits, India's stock markets have experienced a  
downward trend since September 1994 due to a general decline in investor  
confidence, a slowdown in foreign institutional investment, the lack of  
bold economic reform measures in the March 1995 budget announcement, and  
political uncertainty.  As a result, the Bombay Sensitive Index fell  
from a high of 4588 in August 1994 to a low of 3133 in April 1995.  The  
market has recovered somewhat since that time, but remains in a narrow  
trading range below 3400.  Poor market conditions have forced a number  
of companies to postpone plans to float new share issues.  Other  
problems such as inadequate custodial services and delays in the  
delivery of certificates continue.  
  
Effective regulation of the market is also assuming greater importance,  
especially in light of a number of prominent cases of insider trading  
and price manipulation.  As a result, the Securities and Exchange Board  
of India (SEBI) has been given additional powers of enforcement and is  
improving its regulation of the market.  The government promulgated an  
ordinance in January 1995 to provide SEBI with regulatory powers over  
private firms seeking to issue capital, transfer of securities and other  
related matters.  It also lifted the ban on options trading on stock  
exchanges, a move designed to provide greater liquidity to the market.   
However, the rules for options trading have not yet been announced.   
SEBI has announced new rules to provide greater transparency in  
acquisition of shares and takeovers of firms through a system of  
information disclosure.  SEBI has not decided as yet on the resumption  
of "carry-forward" transactions as recommended by a specially-appointed  
committee.  
  
Intellectual Property Rights:  Inadequate protection of intellectual  
property rights, particularly for pharmaceuticals, trademarks, and  
copyrighted material, has been a source of controversy between India and  
the United States for a number of years.  However, India's bid to become  
globally competitive is leading to significant shifts in legislation and  
better enforcement.  The Indian Parliament passed new copyright  
legislation in May 1994 and implemented it in May 1995.  This  
legislation improves protection for copyrighted works, especially  
software.  The Parliament is also expected to approve amendments to  
current trademark legislation this year and  India's commitment to the  
Uruguay Round Agreement will require full patent protection not later  
than 2005.  India implemented some short-term requirements of the  
Agreement by ordinance in December 1994.  However, the ordinance has  
lapsed and the Rajya Sabha (upper house of Parliament) has yet to pass  
the government-sponsored bill providing the government with a mechanism  
to accept patent applications for new chemical and pharmaceutical  
inventions and to provide exclusive marketing rights to such products.   
Government efforts to resolve this issue continue.  
  
Opening the Telecommunications Market:  In September 1994, the  
government announced guidelines for opening basic telephone services to  
private sector competition.  Highlights included: a) a maximum of 49  
percent foreign equity participation in basic telecom services; b) the  
establishment of a regulatory body for the telecom sector; c) the  
creation of 18 telecommunications "circles", roughly equivalent to state  
boundaries, in which one private sector company will be chosen by bid to  
compete in basic services with the existing government-owned telephone  
company; and d) long distance service to be retained for the government  
telephone company.  However, potential bidders raised significant  
concerns and questions about the tender rules and process.  After a long  
internal consultation process, including the intervention of the Prime  
Minister's office and the Ministry of Finance, the Department of  
Telecommunications (DOT) issued clarifications on cellular and basic  
services bids in May 1995.  Thirty-three companies submitted bids for  
cellular services by the June 7 deadline; 16 companies bid for basic  
services in the 18 telecom "circles" June 23.  Tender selections are  
expected later this summer.  DOT plans to establish the long-awaited  
Telecom Regulatory Authority of India (TRAI) under existing legislative  
authority and turn over bid evaluation to that body.  The government  
plans to seek subsequent legislation to establish the TRAI as an  
independent statutory body.  In addition to cellular and basic services,  
radio paging services are being provided by private companies in major  
metropolitan areas.  Proposals for other value added services such as E- 
mail, voice mail, audiotex and video-conferencing are under active  
consideration.  
  
Power Generation:  Despite an 8.6 percent increase in power generation  
from 1993/94 to 1994/95, power shortages of around 7 percent persist  
with peak shortages of about 17 percent.  The Ministry of Power  
estimates that India will need an additional 57,000 MW of generating  
capacity by the year 2002, and the government will only be able to  
provide about a third of that amount.  Two of the eight "fast-track"  
projects have received approval for central government credit support  
("counter-guarantees") in the last year, but only one (Enron) has gone  
to financial closure.  Other fast-track projects are running into  
greater difficulty in their negotiations on the terms of the counter- 
guarantees.  Stung by criticism of the potential for abuse of the MOU  
process, where a state government negotiated the contract for a power  
project with a single developer, the central government in February  
mandated competitive bidding.  No projects have been opened for  
competitive bidding in the past six months, however, and few states have  
expertise to evaluate bids.  The slow progress of the fast-track  
projects suggests that for the foreseeable future, smaller, more easily  
financed projects may be more feasible.  
  
Oil Production and Consumption:  India's crude oil output, after  
stagnating at around 27 million MT in recent years, totaled 32.3 million  
MT in 1994/95 as a result of newly commissioned wells in the Bombay High  
field.  International firms have shown relatively little interest in the  
blocks put out for bids in recent rounds of bidding, however, and the  
restrictions on joint ventures in the most recent round of bidding --  
combined with the marginal quality of the fields on offer -- have  
dampened enthusiasm.  Two years after soliciting bids for work to  
revitalize several of the older fields in the Bombay High, the Oil and  
Natural Gas Corporation (ONGC) has still not awarded a contract, and  
press reports suggest ONGC may withdraw the offer in favor of hiring a  
technical consultant and doing the work itself.  
  
Coal Output:   Coal represents about 67 percent of total commercial  
energy consumption in India.  Output in 1994/95 amounted to 253 million  
MT, compared to 246 million MT the previous year.  Pit head stocks  
declined consistently, from a high of 50.9 million MT in March 1994 to  
36.6 million MT in December 1994.  High ash content (20-30 percent for  
power-grade coal) results in low efficiency of coal-based thermal plants  
and contributes to air pollution.  India continues to import over 6  
million MT of coking coal annually, accounting for about 12 percent of  
steel plant coal consumption.   To accelerate coal output and encourage  
private investment in this sector, the government has permitted  
operation of captive mines for iron and steel, power generation and coal  
beneficiation.  However, fields available to private-sector firms tend  
to be small and difficult to mine.  Power developers frequently have  
little interest in also developing fuel supplies.  Strong unions and  
conservative policies make it likely that the coal sector will remain in  
the control of the Government indefinitely.  
  
Transportation:  The government has invited private sector participation  
to build international and domestic airports.  Six trunk-route private  
airlines began operations in 1994, of which one has already been bought  
by a competitor.  Traffic has grown by 20 percent domestically in the  
last two years, but the private operators have forced Indian Airlines to  
become more efficient.  Simultaneously, foreign carriers have moved  
aggressively into India, dropping Air India's share of international  
traffic below 20 percent.    
  
Indian Railways (IR) moved 368 million MT of freight traffic, up  
modestly from the previous year.  The state railway is underfunded, is  
having its subsidies reduced, but has little leeway to increase either  
freight or passenger fares.  There is no talk of privatizing.  IR is  
short 30,000 freight cars, expected to intensify in the current year as  
industrial production expands and track goes from meter-gauge to  
standard gauge.  To augment railway capacity, IR has invited private  
sector participation on a build-own-lease-transfer basis.   
Electrification, telecommunications, bridge construction and maintenance  
of stations are all major capital projects underway.    
  
The government has also taken steps to permit private sector  
participation in road and port development, but the Federal government  
and states have yet to offer the conditions that will make possible  
significant foreign investment in land and water transport.  Further  
policy initiatives are underway, though, with statutory amendments now  
permitting private tollways.  Officials are willing to consider  
additional changes in consultation with industry representatives.  This  
area offers significant potential for foreign investors, with investment  
in national expressway projects alone estimated at USD 30 billion.   
  
EXTERNAL SECTOR  
  
Foreign Investment:  Total foreign investment inflows in 1994/95 reached  
an estimated USD 4.8 billion, up from USD 4.2 billion the previous year.   
Global Depository Receipts accounted for USD 2 billion followed by  
inflows from foreign institutional investors of USD 1.5 billion and  
other offshore funds of USD 0.3 billion.  Actual inflows of direct  
foreign investment reached USD 1 billion in 1994/95, compared to USD 620  
million in the previous fiscal year.  From August 1991 to December 1994,  
the government approved USD 9.1 billion in direct foreign investment,  
over half of which was approved in 1994.  The U.S. has maintained its  
favored position in India's foreign direct investment, accounting for 25  
percent of total approvals in 1994, followed by the U.K. (9.2 percent),  
and Germany (4.0 percent).  Actual inflows of direct foreign investment  
are expected to remain strong as approved projects are translated into  
new productive assets.   
  
Trade Policy:  Indian trade policy since 1991 has been one of gradual  
trade reform -- reducing India's high tariffs, delicensing imports,  
liberalizing imports of capital goods and promoting exports.  Additional  
steps were introduced on March 31, 1995 in the government's new Export- 
Import Policy, expanding the list of import items under open general  
license (free of licensing restrictions) and introducing expedited  
customs clearance to certain categories of exporters and importers.  The  
availability of special import licenses (SIL), was expanded as an  
incentive to exporters, including export houses, and exporters of  
telecommunication equipment and electronic goods and services.   
Additional items (mostly consumer durables) may now be imported under  
SIL.  In an effort to boost domestic production, the government's new  
policy permits zero-duty import of capital goods where the value (CIF  
basis) exceeds USD 6.4 million). In steps with international norms, the  
policy also introduced for the first time an export control regime for  
sensitive items and technologies.   
  
Exchange Rate:  The rupee-dollar exchange rate at about Rs 31.37/dollar  
remained stable in 1994/95.  However, inflation rate differentials  
between India and its developed trading partners could result in some  
weakening of the rupee.  The rupee is fully convertible on the current  
account; India was the 95th member of the IMF to acquire this status  
under Article VIII of the IMF charter.    
  
Senior government officials have said that convertibility of the rupee  
on the capital account will have to wait for more stable economic  
conditions, especially lower inflation.  
  
Trade Deficit Doubles:  India's exports grew by 16.5 percent in the  
1994/95 fiscal year, rising to USD 26.5 billion.  However, imports rose  
by 19.7 percent, to a total of USD 28.7 billion.  Consequently, India's  
trade deficit nearly doubled, from USD 1.28 billion in 1993/94 to USD  
2.25 billion in 1994/95.    
  
India's major exports are textiles, diamonds, engineering and marine  
products.  Textile exports account for nearly 38 percent of total  
exports, and reached USD 9.9 billion in 1994/95.  Considering the low  
import intensity in this sector, net foreign exchange earnings from the  
textile sector are sizeable.  Computer software exports also registered  
considerable growth, totalling USD 1.2 billion.  Indian imports largely  
consisted of petroleum (about 20 percent), capital goods, and raw  
materials.  
  
Balance of Payments:   India's balance of payments remained strong in  
1994/95.  Private transfers, estimated at nearly USD 6 billion, may  
exceed the combined inflows from foreign institutional investors, euro- 
issues and direct foreign investors.  Most of these private transfers  
are believed to be funds (estimated to be in the billions of dollars)  
which were moved abroad through illegal transactions and under-invoicing  
of exports.  As a result of the large inflow of such funds in 1994/95,  
India's international foreign reserves, excluding gold, rose to USD 21.1  
billion, up from USD 15.5 billion the previous year.  A reduced inflow  
of investment from foreign institutional investors combined with  
reduction in euro-issues in 1995/96 could mean a slight drop in reserves  
this fiscal year.  
  
India's external debt, including defense debt, reached USD 90.5 billion  
in September 1994, down slightly from USD 90.7 billion in 1993/94.  The  
government has adopted a number of measures designed to reduce the  
volatile short-term component of its external debt.   
  
Efforts to restrain the growth of external debt have borne fruit: the  
ratio of external debt to GDP has declined from 34 percent in 1991/92 to  
31.1 percent in 1994/95.  During the 1994/95 fiscal year, the Ministry  
of Finance attempted to cap external commercial borrowing at USD 3.5  
billion in an attempt to limit growth of India's external debt, but  
eventually approved an estimated USD 4.5 billion.  The Ministry has not  
announced a new cap for the current fiscal year, but reportedly expects  
to approve foreign commercial loans of roughly the same magnitude as  
last year.  Restraining external borrowing could affect development  
efforts, particularly foreign investors planning to use foreign  
borrowings to fund large infrastructure projects.  
  
Official estimates project the debt service to increase to USD 12.3  
billion in 1995/96 and to peak at USD 14.5 billion in 1996/97.  In  
1994/95 debt service payments were USD 10.8 billion.  India's  
international credit rating has improved with upgrades from Moody's and  
the Japan Bond Research Institute (JBRI). Moody's upgraded Indian debt  
instruments to investment grade in December 1994, while JBRI upgraded  
them from BBB to BBB+.  Standard and Poor's is also expected to upgrade  
India's credit rating soon.  
  
In January 1994, India became the 115th member of the Multilateral  
Investment Guarantee Agency (MIGA), an affiliate of the World Bank.  The  
MIGA provides guarantees against non-commercial risks and also extends  
promotional and advisory services.   
  
IMPLICATIONS FOR THE UNITED STATES  
  
As noted above, the progress of India's economic reforms offer  
investment and trade opportunities to U.S. firms willing and able to  
accept some measure of uncertainty as the process matures.  India's  
infrastructure sectors, including electric power generation, petroleum  
exploration and development, telecommunications services, airports,  
ports, and transportation are opening for foreign direct investment.   
U.S. investors report that officials in both central and in state  
governments generally welcome U.S. investment proposals, especially when  
it involves priority development areas and the transfer of technologies.  
  
Investment policy changes and licensing requirements are a matter of  
public record, widely reported in the business and financial press.   
When bidders submitted questions to the Department of Telecommunications  
on the terms of international competitions for mobile cellular telephone  
service and basic telephone service, the DoT provided clarifications in  
response, for example.  The Government has pledged to increase the  
transparency of the process and make information available to all  
bidders.  The record is generally good, though some uncertainties  
remain.  Most U.S. firms competing for major investment projects have  
found that a strong local representative is required to keep up with  
local press reports, government policy announcements, and competitors'  
activities.  
  
U.S. Energy Secretary Hazel O'Leary has visited India in July 1994 and  
February 1995, accompanied by a delegation of U.S. businesses seeking  
trade and investment in India.  U.S. Commerce Secretary Ron Brown  
visited India in January 1995, leading a delegation of Chief Executive  
Officers of major U.S. corporations.  By agreement between then-Commerce  
Minister Pranab Mukherjee and Secretary Brown, a U.S.-India Commercial  
Alliance (USICA) was set up in January 1995.  Business leaders from the  
private sectors in both countries were named to the USICA Board and the  
full board held its first meeting on June 19, 1995, in Santa Clara,  
California.  Commerce Minister P. Chidambaram, who had been re-appointed  
to the Commerce Ministry in February 1995, participated in the USICA  
Board meeting.  
  
Investment Climate:  Since July 1991, Indian Government approvals for  
equity investments of up to 51 percent in most manufacturing industries  
have been automatic.  The Foreign Investment Promotion Board, which  
reports directly to the Prime Minister's Office, is empowered to accept  
applications for foreign direct investments above 51 percent.  The only  
sectors of the Indian economy specifically excluded from foreign  
investment are the defense sector, railways, and atomic energy.  During  
1994, U.S. firms obtained USD 1.1 billion of new investment approvals.   
This sustained level of U.S. investment proposals for India made the  
U.S. the leading source of new capital and technology for foreign direct  
investment in 1994.  
  
U.S.-India Trade:  As reported above, U.S. exports to India in 1994  
declined by USD 465 million, a decrease of 17 percent from 1993.   
India's exports to the U.S. grew by USD 751 million in 1994, a 17  
percent increase.  India's trade surplus with the U.S. exceeded USD 3  
billion in 1994, while two way trade volume grew to USD 7.6 billion.   
Major U.S. exports to India include high-tech products and sophisticated  
machinery, aircraft parts and avionics, fertilizers and metal scrap.   
Indian exports to the U.S. include diamonds, textiles, cashew nuts, and  
iron and steel products.  
  
Best Prospects for U.S. Exports:  India's market continues to offer  
commercial opportunities for U.S. exports of aircraft and parts; oil and  
gas-field machinery; electronic and scientific equipment;  
telecommunications equipment and services; medical equipment; chemical- 
production machinery; machine tools and metal-working equipment;  
computer software and services; mining equipment; computers; peripheral  
devices and specialized CAD (computer-aided design), CAM (computer-aided  
manufacturing), and CAE (computer-aided engineering) systems; port and  
shipbuilding equipment; specialized railway equipment; printing and  
graphic-arts equipment; hotel and restaurant equipment; industrial  
process controls; environmental technologies and services; and financial  
services.  
  
Commercial, Trade Promotion, and Business Advocacy Services:  U.S. firms  
considering entering the Indian market can find participation in trade  
events sponsored or certified by the U.S. Department of Commerce or the  
U.S. & Foreign Commercial Service an excellent introduction to business  
in India.  U.S.-India Commercial Alliance trade events in such sectors  
as information technology, energy, infrastructure and transportation,  
and agribusiness are planned for 1995-96.   
  
Interested U.S. firms can contact the U.S. Department of Commerce Office  
of South Asia and Oceania at (202) 482-2954 or FAX: (202) 482-5330.  The  
nearest office of the U.S. & Foreign Commercial Service (listed in the  
local telephone directory under U.S. Government, International Trade  
Administration) can also provide business counseling and export  
assistance services.  U.S. firms may also contact one of the five  
offices of the U.S. Commercial Service in India (Bangalore, Bombay,  
Calcutta, Madras, or New Delhi).  For more information, please write or  
fax:  U.S. Commercial Service, U.S. Embassy, Shanti Path, Chanakyapuri,  
New Delhi 110 021, FAX: 011-91-11-687-2391.  
  
  
  
                  Chapter III.  Political Environment  
  
India and the United States enjoy improving relations in the post-cold  
war era.  Expanding trade, investment, and commercial ties between the  
world's two largest democracies are spurring the two governments to work  
for greater cooperation on difficult bilateral and global issues,  
including non-proliferation of weapons of mass destruction, human  
rights, and multilateral trade issues.  The improvement in our relations  
is reflected in a series of high-level exchanges between our two  
governments.  Prime Minister P.V. Narasimha Rao met President Bill  
Clinton at the White House in May 1994.  During 1994-95, Deputy  
Secretary of State Strobe Talbott, First Lady Hillary Rodham Clinton,  
Energy Secretary Hazel O'Leary (twice), Defense Secretary William Perry,  
Commerce Secretary Ron Brown, and Treasury Secretary Robert Rubin all  
visited India.  
  
Major Political issues affecting the business climate  
  
Prime Minister Rao's tenure has been marked by his sweeping economic  
reform program, launched in 1991, which is moving India from a planned  
to a market economy.  These reforms are likely to continue for the  
foreseeable future, although their pace will be influenced by political  
calculations as Rao faces tough national elections prior to June 1996.   
Individual states are increasingly seeking foreign investments on their  
own.  Somewhat mitigating this otherwise "business friendly" environment  
are India's stultifying, and still largely unreformed, bureaucracies;  
New Delhi's ongoing dispute with Pakistan that has resulted in three  
previous wars; and caste and communal tensions that have worsened,  
sometimes violently, in recent years.  Nevertheless, on balance, India  
is becoming an increasingly attractive business environment and most  
industrialized nations are rapidly expanding their commercial presence  
in the country.  
  
Brief Synopsis of the political system  
  
India is a multi-ethnic, multi-religious, federal republic composed of  
25 states and 7 union territories.  The country has a bicameral  
parliament - including the Upper House, the Rajya Sabha (government  
assembly), and the Lower House, the Lok Sabha (people's assembly).  The  
judiciary is relatively independent and the legal system is based on  
English common law.  National and state elections are ordinarily held  
every five years, although they may be postponed in an emergency and may  
be held more frequently if the government loses a confidence vote.  The  
last national election, held in 1991, returned the Congress(I) party-- 
which has ruled India for almost all of its independent history--to  
power.  Current Prime Minister and Party Chief P. V. Narasimha Rao,  
however, is only the second Congress(I) leader not from the Nehru-Gandhi  
dynasty which controlled the party until Rajiv Gandhi's assassination in  
1991.  The major opposition party, the Bharatiya Janata Party (BJP) is a  
rightist,  Hindu-chauvinist party that emphasizes Indian nationalism.   
The BJP has supported market reforms and claims to favor closer  
relations between India and the United States, but its new coalition  
government in Maharashtra has been critical of a major U.S. power  
project approved under the former Congress(I) government.  
  
  
  
          Chapter IV.  Marketing U.S. Products and Services  
  
Following the 1991 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  
taking place now.  
  
Distribution and sales channels  
  
India is a Subcontinent, nearly 2,000 miles from north to south and  
1,800 miles from east to west.  India's coastline is 3,800 miles long  
and its area is 1.3 million square miles.  Vast distances separate the  
most populous cities of India.  
  
India. Population of major cities, 1991.  
  
   City        Population  
  
   Bombay      12,572,000  
   Calcutta    10,916,000  
   Delhi        8,375,000  
   Madras       5,361,000  
   Hyderabad    4,280,000  
   Bangalore    4,087,000  
  
Source: India. 1991 Census.  
  
There are no national department store chains.  Shopping centers are  
unknown, though all cities have well-known market districts.  Retail  
sales outlets are almost always locally owned.  Buying and selling is  
often a process of bargaining and negotiation and frequently take place  
in a market.  A leading manufacturer of cosmetics and personal care  
products sells to 200 million Indians through a network of 100,000  
retail outlets across the country.    
  
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 dishes and receive cable TV, moving  
goods is still much more difficult than broadcasting information in  
India.  
  
The largest cities of India, Bombay in the west, Delhi in the north,  
Calcutta in the east, and Bangalore, Hyderabad and Madras in the south,  
give the country a strong regional character.  Just as the languages in  
different areas vary, so too do consumer and business preferences and  
marketing practices.  
  
India has both organized and unorganized channels for selling goods.   
Before import liberalization, smuggling such luxury consumer items as  
color TV's, videotape machines, air conditioners, jewelry and gold  
developed into a thriving "unorganized" sector of the economy.  By  
avoiding customs duties and delays, using cash transactions, and  
avoiding taxes, the unorganized merchants could offer better prices than  
those in the organized sector.  One factor encouraging India's  
Government to reform was the growing revenue loss due to the activities  
of the "black" economy.    
     
  
Use of agents and distributors - finding a partner  
  
India has nearly 5,000 years of cultural history backing up its  
merchants and business families.  The major business houses of India are  
large and powerful dynasties of family-owned businesses.  An American  
executive learning about the business world of India will quickly learn  
some of the following names of India's prominent business families:  
  
Ambani. Synthetic textiles, textile intermediates, petroleum,  
petrochemicals, refining, and finance. More recent interest in  
telecommunications. Renowned for ability to manage government relations.  
Group name Reliance.  
  
Tata. Iron and steel, information technologies, hotels, power  
generation, automobiles, finance, consumer products, printing,  
engineering, consultancy, research & development and education. Several  
U.S. collaborations, including AT&T, IBM, Honeywell and Raytheon.   
  
Birla. Textiles, paper, jute, cement, steel, aluminum, shipping,  
automobiles, edible oils, engineering, education, consultancy,  
publishing and research institutions. Best-known companies are Century,  
Indian Rayon, Grasim and Hindalco.  
  
Thapar. Paper, telecommunications, electronics, textiles, glass,  
aquaculture. Best-known company is Ballarpur Industries.  
  
Goenka. Tires, telecommunications, power, cables, audio tapes & records,  
electronics, engineering, chemicals. Group name RPG, although there are  
other Goenka's with other businesses.  
  
Bajaj. World's largest manufacturer of two wheelers.    
  
Ruia. Shipping, steel, oil, finance. Group name Essar.  
  
Singhania. Textiles, cement, consumer goods, tires, paper.  
Group name JK.  
  
Hinduja. U.K.-based trading, manufacturing and financing conglomerate  
with strong political connections.    
  
Shriram. Fertilizers, automobiles, consumer goods, engineering,  
financial services, fibers, textiles, real estate, sugar. Group name  
Shriram and DCM.  
  
Modi. Steel, tires, electronics, chemicals, cement, telecommunications.  
Best-known collaboration is with Xerox for office automation products.  
Most group companies are not doing well.  
  
Mallya. Breweries, distilleries, aviation, pharmaceuticals, medical,  
processed foods, petrochemicals. Group name UB.  
  
New businesses, widely-held and professionally managed, are also part of  
India's business world:  
  
ITC. India's largest private sector company and largest export earner.  
Tobacco, hotels, edible oils, printing, packaging, financial services,  
software.  
  
Larsen & Toubro. India's premier engineering company in the  
petrochemical, cement, telecommunications, electronics and process  
machinery sectors.   
  
Franchising  
  
Franchising is almost unknown in India.  The U.K.-based Wimpy's chain  
has opened several stores in Delhi, but the costs of land acquisition  
and the length of time required to obtain local governments' approvals  
for water, power, and other essentials have delayed the entry of major  
franchise operations.  
  
While Pepsico's Pizza Hut and the McDonald's Corp. have announced plans  
to open in India, both are moving slowly to avoid any unexpected  
disappointments.  Pepsico's Kentucky Fried Chicken fast-food store  
opened its first restaurant in June 1995, in Bangalore.  
  
Direct marketing  
  
The mail service in India is slow though generally reliable.  Telephone  
service is poor.  While private courier services are growing strongly  
and the telecommunications sector is opening up for a range of modern  
services, until goods can be ordered conveniently and delivered with  
certainty, direct marketing will be limited to door-to-door sales.  An  
inefficient state-owned banking system also prevents prompt transfers of  
funds from consumers to retailers.  
  
The most successful direct marketers in India today are the millions of  
door-to-door sales representatives who visit neighborhoods and villages  
across the Subcontinent.  From ice cream vendors to carpet sellers,  
India's residential neighborhoods are frequently visited by merchants  
offering a variety of products.  
  
Banking  
  
India has an extensive banking network, in both urban and rural areas.  
All large Indian banks are nationalized, and all Indian financial  
institutions are in the public sector.  25 foreign banks operate in  
India with full banking licenses. Several licenses for private banks  
have been approved and these banks have already started operations.   
  
The Reserve Bank of India 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 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. 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. In terms of business, the public sector  
banks, namely the State Bank of India and the nationalized banks,  
dominate the banking sector.   
  
All sources of local financing are available to foreign-participation  
companies incorporated in India, regardless of the extent of foreign  
participation. Under foreign exchange regulations, foreigners and non  
residents, including foreign companies, require the permission of the  
Reserve Bank of India to borrow from a person or company resident in  
India.  
  
The Reserve Bank of India lays down restrictions on bank lending and  
other activities with large companies. These restrictions, popularly  
known as "consortium guidelines" seem to have outlived their usefulness,  
because they hinder the availability of credit   
to the non-food sector and at the same time do not foster competition  
between banks.   
  
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.  
  
All commercial banks face stiff restrictions on the use of both their  
assets and liabilities. Forty percent of loans must be directed to  
"priority sectors" and the high liquidity ratio and cash reserve  
requirements severely limit the availability of deposits for lending.  
  
The financial system remains inaccessible to the poorest people in  
India.   
     
Joint ventures and licensing  
  
Between 1974-1991, U.S. firms were prohibited from owning 100 percent of  
their Indian operations.  Under the Foreign Exchange Regulation Act  
(FERA) of 1973, the share of foreign equity in an Indian corporation was  
limited to 40 percent.  U.S. firms found several solutions to the  
problems created by FERA.  Kodak offered its shares to the Indian  
public.  While Kodak owns 40 percent of its Indian affiliate, the other  
60 percent is owned by thousands of private individuals.  Not all U.S.  
firms took this option.  Many, like Exxon, IBM, and Coca-Cola believed  
that they had no choice other than closing their businesses in India.   
Since 1991, the Government of India has taken a positive attitude toward  
foreign direct investment into India.  The change in law and attitude is  
reflected in the fact that Coca-Cola, Exxon, and IBM have all returned  
to India, in one business or another.  
  
U.S. investment in India requires approval by the Foreign Investment  
Promotion Board (FIPB), the Reserve Bank of India (RBI), and by the  
Secretariat for Industrial Approvals (SIA).  Knowledge about the process  
and the precedents will assist U.S. firms seeking to invest and expand  
their businesses in India.  The U.S. Embassy promotes U.S. export- 
enhancing investment into India and offers business counselling to U.S.  
firms on a client-confidential basis.  
   
India's 1991 economic reforms.  The government of Prime Minister P.V.  
Narasimha Rao issued a "new industrial policy statement" in July 1991  
welcoming foreign direct investment (FDI) which will contribute to  
India's industrial development.  The Rao government identified broad  
categories of industries and agreed to give automatic approval of  
foreign technology transfer  and royalty agreements and foreign equity  
investments of up to 51 percent in these high-priority industries.  The  
actual list of such industries is called the "annexure III industries"  
list and contains specific items listed with code numbers based on the  
Indian trade classification.  This list may be revised from time to  
time.  Before applying for approval of a specific project, U.S. firms  
should seek competent legal, taxation, negotiating, financing, and  
accounting advice.  
  
High-priority (annexure III) industries.  High-priority industries, as  
defined by the government in annex 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; tools; agricultural machinery; earth-moving machinery;  
industrial instruments; scientific instruments; fertilizers; chemicals;  
drugs and pharmaceuticals; papers and laminates; heavy-duty rubberized  
and plastic products; plate glass; ceramics for industrial use; cement;  
high-technology reproduction equipment; carbon and carbon products;  
high-pressure RCC pipes; printing machinery; welding electrodes;  
industrial synthetic diamonds; biological products; prefabricated  
building materials; soya products; high-yield plant products; food  
processing; packaging; hotels and tourism; software development.   
  
U.S. Investors seeking approvals.  U.S. Investors who wish to invest in  
industries not listed in the high-priority list (for example, in  
consumer goods, financial services, etc.) Or those who wish to invest in  
a venture with more than 51 percent of the equity (including a wholly- 
owned subsidiary operation) must submit an application for approval to  
the foreign investment approval board (FIPB), which is located in the  
office of the Prime Minister, New Delhi.  
  
FIPB members.  The FIPB has four permanent members: the Principal  
Secretary to the Prime Minister (Mr. A.N. Verma); the secretary of  
finance (Mr. Montek Singh Ahluwalia);  the secretary of industry (Mr.  
Surendra Singh); and the secretary of commerce (Mr. Tejendra Khanna).   
Depending on the content of the investment proposal, other secretaries  
(from the ministry of power, for example) will be invited to join the  
FIPB meeting.  The Prime Minister's Office (PMO) staffs the FIPB and is  
responsible for organizing and summarizing proposals for the meetings of  
the FIPB.  Mr. Dinkar Khullar of the PMO now acts as secretary to the  
FIPB.  
  
FIPB meetings.  The FIPB is scheduled to meet weekly on Saturday  
mornings to review investment proposals.  The members of FIPB review the  
summaries of proposals and then make a recommendation on approval to the  
foreign investment committee of the council of ministers.  This  
committee, which includes both the prime minister and finance minister  
Dr. Manmohan Singh, is also referred to as the "Empowered Committee" and  
may give final approval to proposals, deny approval, postpone action, or  
refer a proposal back to the FIPB or a concerned ministry of government.   
Meetings are not public and only approvals are announced.  
  
India.  Foreign investment proposals, 1991-94, by FIPB action  
  
Approved                900         74  
Withdrawn/Referred      257         21  
Denied                   65          5  
---------------------------------------  
Total                 1,222 cases  100%  
  
Source: May 1994 India business and investment report.  
  
Time required for application and approval.  If the U.S. Investor has  
written a proposal well, 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 goals, and invite objections on  
political, environmental or public health or welfare grounds are likely  
to be denied.   
   
FIPB precedents.  
  
On the basis of approvals to date, we believe a U.S. Investor is more  
likely to receive approval for a proposal which: 1) is well written; 2)  
includes transfer of technology or new skills to India; 3) helps to  
increase exports from india; 4) shares future profits with an Indian  
equity partner (particularly in cases of consumer goods investment  
proposals).  Often, a key element in the success and rapid approval of a  
proposal has been the quality of the preliminary work.  A U.S. Investor  
or a professional process manager (lawyer, consultant, indian business  
partner, etc.) May seek the advice of relevant indian government  
officials.  In such meetings, a U.S. Investor may answer questions and  
resolve uncertainties before making a formal proposal to the FIPB.     
  
Steps to establishing an office  
  
Any investment from a U.S. firm into India requires the prior approval  
of the Government of India.  Investments in high-priority industries or  
for trading companies primarily engaged in exporting are given almost  
automatic approval by the RBI.  U.S. firms may also seek approval from  
the Foreign Investment Promotion Board or from the Secretariat for  
Industrial Approvals in India's Ministry of Industries, New Delhi.  
  
This checklist outlines the steps we recommend a U.S. firm follow in  
opening an office in India:  
  
1. Assess your commercial opportunity;  
2. Plan your business, obtain legal, financial, official,  
   environmental, and tax advice as needed;  
3. Choose to go it alone or select a partner;  
4. Choose legal structure;  
5. Choose capital structure;  
6. Select a location;  
7. Obtain personnel;  
8. Develop a product marketing strategy;  
9. Comply with all laws on registration, approvals, and taxation.  
  
  
Selling factors, techniques  
  
One consequence of the high protective tariffs India enacted was that  
all too often Indian firms produced high-cost, low-quality goods.   
Indian consumers, lacking any other choice, were compelled to buy these  
products.  As import duties have dropped -- though they are still high  
by world standards -- Indian consumers have gained some freedom of  
choice about what products to buy.    
  
Since returning to India in late 1993, the Coca-Cola Company has  
upgraded local bottling plants and advertised heavily.  Pepsi has  
matched this marketing effort with a variety of competing techniques.   
The "cola wars" are the subject of press stories and marketing analysis  
reports.  Consumers are finding that competition brings some attractive  
benefits as prices are lowered and bottle sizes increase.    
  
The basic requirements of an Indian customer are quality, price,  
delivery, and after-sales service.  As a case study, the recent  
experience of General Electric Corporation (GE) and the Godrej Group is  
described.  
  
India's free market reforms and its growing middle class provide  
commercial opportunities to U.S. firms producing consumer goods.   
India's remaining restrictions on direct imports of consumer goods  
require U.S. firms to consider alternate entry strategies.  One case  
study of consumer durables marketing suggests that mutually profitable  
alliances can be made with private Indian firms.    
  
A case study in consumer durables:  In February 1993, the privately-held  
Indian company Godrej & Boyce Pvt. Ltd. joined hands with GE Appliances,  
one of the core businesses of the General Electric Corporation (GE). The  
venture agreed to develop, manufacture and market selected household  
appliances in India. The early positive results of the venture offer  
several lessons for other U.S. firms.  As of June 1995, this appears to  
be a successful strategy to address the demand for home appliances in  
the Indian market.  
  
Demand among middle class households:  Refrigerators were formerly  
luxury items but the growth of India's middle class can be measured by  
expanding sales.  In 1986, less than 800,000 refrigerators were sold in  
a nation with a population of 850 million.  Sales in 1990 had grown to  
well over 1 million machines.  Having been in the refrigerator business  
for more than three decades, Godrej had already developed a strong brand  
image among Indian households able to buy such appliances.  The success  
of its "PUF" brand of refrigerators strengthened its position further as  
households added this consumer durable good.  Around the time of the  
1993 joint venture with GE, Godrej was earning about USD 76 million on  
its refrigerators, net of excise taxes.  
  
Although its sales were good, Godrej senior managers realized that the  
appliance business would face stiff future competition.  India's 1991  
industrial reform program opened India to global manufacturing and  
consumption trends.  The arrival of Rupert Murdoch's StarTV satellite  
broadcasting meant that high income consumers with television sets and  
cable connections could see a variety of desirable goods and advertising  
messages.  Refrigerator manufacturing and marketing was a specialized  
business that was driven primarily by local markets. At the time Godrej  
was scouting for a foreign tie-up, GE Appliances was seeking an entry  
into India.  They found each other and the joint venture was formed.   
Godrej took 60 percent of the equity, and GE Appliances, 40 percent.  
  
As of 1993, GE was among the top three in appliances worldwide and was  
without an Indian partner in this sector.  Competitors of GE Appliances  
such as Whirlpool (Benton Harbor, Michigan) had tied up with the TVS  
group and Electrolux (Sweden) with Kelvinator of India Ltd.   For GE,  
the joint venture represented an essential market entry strategy.   
Richard Stonesifer, President and CEO, GE Appliances U.S.A., said at the  
time "We are very aggressively expanding our business around the world  
through partnerships.  India was a very important part of GE's global  
strategy."  
  
In the first year since its launch, Godrej-GE achieved sales of USD 109  
million net of excise.  It became the first company in India to cross  
the 600,000 units mark, having manufactured and shipped 616,000  
refrigerators in its first twelve months.  It has also made a foray into  
the washing machines market, with the launch of its "Powerwash" brand in  
1994.   
  
The Godrej-GE joint venture has enabled Godrej, already a strong market  
force, to extend its product range.  Godrej-GE now offers refrigerators  
for every consumer segment -- from its tiny, low cost model with 100  
liter capacity to its high-end model with a 3-door, 390 liter capacity.   
This complete line has increased the brand's presence in the market.   
Godrej-GE has also taken the lead in the replacement segment, offering  
incentives to trade-up.  Development of consumer finance credit  
facilities and monthly payment arrangements have increased growth in  
this market, too.  
  
Godrej-GE's entry into India's USD 85 million, 400,000 units washing  
machine market uses a well thought-out strategy.  GE sought to leverage  
Godrej's trusted "PUF" brand by extending it to washing machines.   
"Powerwash," an attractive, top-loading machine with high acceptability  
was launched.  The Powerwash is the only machine that comes with a mini- 
wash basket for smaller, delicate clothes.  The machines, with built-in  
castors for easy movement, come in three models, priced from USD 220 to  
440.  
  
Godrej-GE did not build a new plant to manufacture consumer appliances.   
Instead, borrowing from GE Appliance experience, the joint venture chose  
out-sourcing.  For the manufacture of its washing machines, the company  
brought in Videocon Pvt. Ltd., India's number one washing machine maker,  
with a 60 percent share, and also the smaller, Delhi-based Maharaja  
International.  Purchases from these companies are branded under the  
Godrej name and marketed through its 4,000-plus retail outlet dealer  
network.  By the end of 1994, Powerwash became a strong number two  
brand, with a 15 percent market share.  
  
Over the next few years, Godrej-GE plans to introduce other domestic  
appliances such as microwave ovens, gas cooking ranges, dishwashers and  
room air conditioners.  Although each of these products will be designed  
and marketed by Godrej-GE, the products would be sourced from outside  
original equipment manufacturers (OEM's), like the arrangements it  
currently has for its washing machines.  
  
The outsourcing option adopted by Godrej-GE is an innovation in the  
Indian context.  The main reason Godrej-GE may have adopted this  
practice is to save time in establishing its larger presence in the  
market.  According to the local press, the company has plans to launch  
more of GE's international products.  While GE is number one for room  
air conditioners, the firm has not manufactured a single unit in the  
last five years. Combining marketing skills with existing production  
capacity is the key to success.  GE is in India to build markets, not  
factories.    
  
Godrej-GE believes that future demand will justify adding its own  
manufacturing capacity in India.  By 1996, Godrej-GE may set up two  
plants, one to manufacture washing machines in Maharashtra state, which  
has the highest demand, and the other for refrigerators, in Punjab  
state.  The company already has two refrigerator plants near its Bombay  
headquarters.  The Punjab plant, with an installed capacity of 500,000  
units a month, will cater to the growing demand for the Godrej brand,  
specially with the growth in the replacement market.  The GE-Godrej  
venture intends to export to regional markets in South and West Asia.  
  
Godrej-GE is using a double strategy to win market share.  To challenge  
its competition, the company is concentrating on shorter introduction  
times for new products.  Besides this short-cycle marketing push,  
Godrej-GE also plans to attract new consumers through its programs to  
make machines more affordable.  With Countrywide Consumer Financial  
Services, a joint venture between GE Capital and the Indian Housing  
Development Finance Corporation, Godrej-GE dealers can arrange consumer  
financing and monthly payments for new refrigerators and washing  
machines.  
  
Although the joint venture has not yet launched a full range of GE  
appliance products in India, the initial year's experience was positive.   
Godrej benefited from GE's technology and knowhow in basic refrigeration  
technologies.  These, along with process knowhow, have already been  
passed on to Godrej.  GE has also helped with product innovations,  
planning and productivity. For GE, the venture has provided GE  
Appliances an entry into a market with high import tariffs on finished  
consumer goods.  India's growing middle class will continue to be a very  
important part of GE's global strategy. The combination of a major  
Indian firm with a global giant, along with the careful alignment of  
their shared philosophies and approaches has produced a powerful force  
for the expansion of U.S. sales in this market.  In time, Godrej-GE aims  
to be the number one player in the home appliances market.  If they can  
sustain their skillful and well-supported initial strategies over the  
long run, they may achieve this goal.  
  
Advertising and trade promotion  
  
Advertising and trade promotion activities are well-developed in India.   
Most major U.S. advertising firms have chosen local Indian partners for  
their work in this market.  Bombay remains the center of the advertising  
business in India.  
  
India has a diverse and growing number of daily newspapers.  Since 1991,  
the increase of business and financial news reports in English-language  
and vernacular dailies has paralleled the economic reform program and  
the ups and downs of the stock markets.  
  
Leading business newspapers include both the Business Standard and the  
Economic Times. Magazines include India Today, Business India, Business  
Today, and Business World.  
   
Major Indian business associations and organizations  
  
India's private businesses are organized into three leading business  
organizations:   
  
Associated Chambers of Commerce (Assocham)  
  
Assocham is the oldest national organization of the Chambers of Commerce  
in India.  It is non-political, seeking a close working relationship  
with the Government and representative business and commercial  
organizations.  
  
Confederation of Indian Industry (CII)  
  
The CII has more than 2,000 corporate members whose total capital  
investment is over USD 33 billion.  CII members include public  
enterprises (Oil & Natural Gas Corp., Gas Authority of India, Ltd.,  
Steel Authority of India Ltd.) as well as the major private business  
houses of India.  The CII organizes trade fairs, conferences, and  
meetings.  It has signed a Memorandum of Understanding with the U.S.  
National Association of Manufacturers.  In June 1995, the CII opened an  
office in Washington, D.C., and put CII Director Kiran Pasricha in  
charge.  The CII office is located in the National Electrical  
Manufacturers Association (NEMA) building, telephone (202) 457-8428, FAX  
(202) 457-8411.  
  
Federation of Indian Chambers of Commerce and Industry (FICCI).  
  
FICCI was established in 1927 as a central organization of industry,  
trade and commerce in India.  The Government has invited FICCI to join  
over 100 advisory bodies for policy review and recommendation.  FICCI  
organizes trade fairs, conferences, and workshops to serve its members.   
FICCI has a longstanding relationship with the U.S. Chamber of Commerce  
(Washington,D.C.), and with the U.S.-India Business Council.  
  
Pricing product  
  
Indian consumers are very sensitive to price considerations.  Many  
consumer product suppliers have found it helpful to package smaller  
portions at reduced prices rather than "economy" sizes.  
  
While some Indian consumers are aware of quality differences and insist  
on world standards of quality, many customers sacrifice quality concerns  
for price reductions.  In East Asia, Europe, and North America, for  
example, laser printers and inkjet printers have almost eliminated the  
dot matrix printer from homes and offices.  In India, dot matrix  
printers are still used in business correspondence by major industrial  
groups.  The price advantage of this older technology means that its  
lifetime has been extended in this market.  
  
Sales service and customer support  
  
Businesses insist on the highest standards of maintenance services and  
prompt response to problems.  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.  
  
Selling to the Government  
  
The Government of India regularly advertises its requirements for the  
purchase of supplies and new equipment.  These foreign government  
tenders are reported to the U.S. Department of Commerce, which publishes  
them on the Economic Bulletin Board and then in the National Trade Data  
Bank.  For more information about these information services, including  
subscription prices, please call the U.S. Department of Commerce (202)  
482-2000.  
  
Protecting your product from loss of patent, copyright, or trademark  
protection  
  
Present Indian law prohibits product patents for any invention intended  
for use or usable as a food, medicine, or drug.  The Indian Patents Act  
(1970) also forbids product patents for substances prepared through or  
produced by chemical processes.  While the process used to produce such  
a food, medicine, drug, or chemical product can receive a patent under  
Indian law, the product itself cannot.  The life of a process patent is  
five years from the issuance of the patent or seven years from the date  
of filing a patent application, whichever is shorter.  India grants  
patents to products which are not chemicals or drugs.  The life of a  
product patent on such inventions is 14 years from the date of filing.  
  
U.S. chemical and pharmaceutical firms have lost many millions of  
dollars in revenues to Indian pirates.   These firms employ talented  
scientists and technicians who reverse-engineer foreign products which  
lack product patent protection.  These firms then sell them in India and  
other markets lacking adequate protection for intellectual property  
rights.  
  
In response to complaints, the U.S. Trade Representative (USTR)  
initiated an investigation of India's intellectual property practices in  
May 1991.  The "Special 301" section of the U.S. Trade Act of 1988  
authorized this action.  In April 1992, USTR concluded that India failed  
to provide adequate patent protection to U.S. commerce.  As a result,  
the U.S. withdrew benefits valued at USD 80 million granted to Indian- 
origin drugs and chemicals under the Generalized System of Preferences  
(GSP).  As of June 1995, India remains a priority foreign country under  
the "Special 301" section of U.S. trade law.  India's decision to sign  
the final act of the GATT (General Agreement on Tariffs and Trade)  
Uruguay Round on April 15, 1994, in Marrakesh, Morocco, obligates the  
Government to enact a comprehensive system of product patents by 2005.   
The Government has introduced legislation to amend the Indian Patents  
Act to bring it into conformity with its World Trade Organization (WTO)  
obligations.  As of mid-1995, the bill has passed in the lower house of  
the Indian Parliament but has been referred to committee in the upper  
house.  
  
Current Indian law protects copyrights.  India is a member of the  
Universal Copyright Convention and the Berne Convention.  In May 1994,  
Parliament approved amendments to the existing copyright law (Copyright  
Act, 1957) which enlarged the scope of protection and introduced stiff  
mandatory penalties for misuse of copyrighted material.  
  
Trademark protection in India is also considered good.  A U.S. firm may  
register a trademark in accordance with the Trade and Merchandise Marks  
Act (1958).  An application is advertised and objections are received  
and adjudicated. A license/royalty agreement between a U.S. trademark  
owner and an Indian licensee is subject to prior approval by the RBI.   
  
Amendments to the existing law have been introduced and may be enacted  
by 1995.  Police are being trained in enforcement and courts have acted  
to expand the rights of owners of copyrights and trademarks in recent  
decisions.  
  
Need for legal services  
  
Like the U.S., India has adapted a legacy of British common law and  
precedent to its national circumstances.  Most major U.S. international  
law firms have existing correspondent or informal relationships with  
leading solicitors and advocates in India.  As of June 1995, Chadbourne  
and Park, a major U.S. law firm, has opened a representative office in  
New Delhi and at least two other U.S. law firms have requested approval  
for opening their offices here.  Indian bar associations regard the  
entry of foreign law firms as a competitive threat to their existing  
business and advocate that the Government of India restrict entry to  
firms from nations which grant reciprocal treatment to Indian law firms.   
The U.S. Embassy may not recommend any individual or firm to supply  
legal services.  We do maintain a list of such firms who are used by the  
local offices of U.S. corporations.  This list is available on request.  
  
Need for accounting and tax advisory services  
  
All of the major U.S. accounting firms have offices in India.  The U.S.  
Embassy may not recommend any individual or firm to supply accounting or  
tax advisory services.  We do maintain a list of such firms who are used  
by the local offices of U.S. corporations.  This list is available on  
request.  
    
Need for business consulting and market research services  
  
Following the 1991 reforms, many U.S. firms have decided to gather  
information about commercial opportunities in India.  Over the past  
year, the demand for market research has increased and prices have  
risen.  The U.S. Embassy offers an introductory market research service  
designed to answer nine basic questions.  The "Comparative Market  
Analysis" (CMA) is priced at USD 1,600 as of June 1995 and is available  
on request and payment.  The U.S. Embassy may not recommend any  
individual or firm to supply market research or competitor intelligence  
information.  We do maintain a list of such firms which we have used in  
the past with good results, or which have been used by the local offices  
of U.S. corporations.  This list is available on request.  
  
  
  
      Chapter V.  Leading Sectors for U.S. Exports and Investment  
  
BEST PROSPECTS FOR U.S. GOODS AND SERVICE SALES IN INDIA 1995-96.  
  
Rank Order of                  ITA Industry      Est. U.S.  
Industry Sector                  Code            imports in  
  
                                1996  
                            ($ million)  
  
1. Aircraft & Parts               AIR         960  
2. Telecommunications Services/  
   Equipment                      TEL/TES   731  
3. Computer Software              CSF       397  
4. Electric Power Generation      ELP        -   
5. Urban Mass Transportation      TRN        -   
6. Industrial Chemicals           CHM       215  
7. Plastic Materials & Resins     PMR       210  
8. Computers & Peripherals        CPT       164  
9. Mining & Minerals Processing   MIN       105  
     Equipment  
10. Iron & Steel Plant Equipment  IRN        90  
    Services  
11. Oil/Gasfield Equip.& Suppl.   OGM        80  
12. Food Processing & Packaging   FPP        45  
     Equipment  
13. Hazardous Waste Management    POL        45  
14. Broadcast Cable & Satellite   TEL        42  
     Equipment  
15.Med. Electronics & Consum.     MED        41  
16.Aviation Equpmnt & Services    APG/AVS    32  
  
Source: US&FCS India (Bangalore, Bombay, Calcutta, Delhi, and Madras  
offices), based on industry experts and publicly available sources.   
Estimates.  
  
  
        BEST PROSPECTS FOR NON AGRICULTURAL GOODS AND SERVICES  
  
PART I:           BEST PROSPECTS   
Rank of sector:   1  
Name of sector    AIRCRAFT AND PARTS  
ITA industry code AIR  
  
PART II:   NARRATIVE:   
  
A.  Air passenger traffic is growing faster in Asia than in any other  
region of the world.  India's Civil Aviation sector is expected to grow  
at the rate of 8 percent a year by conservative government planners.  In  
fact, India's private air operators forecast this growth rate to be  
almost 12 percent.  Tourism is expected to expand sizably in India.  The  
Government wants to put India onto the international tourist map,  
especially after the "plague scare" of September 1994.   The economic  
liberalization policy followed by the Government has served to put India  
in the league of "Big Emerging Markets" and by 2020 India is likely to  
be one of the largest economies of the world.  If annual growth rates of  
6 percent can be sustained, both international and domestic business  
travel will increase.    
  
The Government of India owns two airlines.  Air India is the national  
flag carrier and flies international routes.  Indian Airlines is the  
government-owned domestic carrier, which dominates the market.  Both Air  
India and Indian Airlines have plans to increase their capacity by  
adding new aircraft to their existing fleets.  The capacity expansion of  
Air India is of greater consequence as Air India plans to have one of  
the youngest fleets among the various international airways by the year  
2000.  These plans have gained added impetus on account of the fact that  
Air India has not been able to fully exploit the potential of bilateral  
civair agreements with almost all the nations of the western block,  
including the U.S., owing to inadequate capacity.  After 1991, private  
airlines were permitted to offer domestic service between India's major  
cities.  East-West, Jet Air, Modiluft, etc., have begun operating their  
own fleets of aircraft.  The private airways, operating domestically,  
are also planning or implementing fleet expansion plans.  Interestingly,  
in the sphere of acquistion of aircraft for domestic travel, the latest  
trend of private carriers is to acquire turboprops as these can be much  
more cost effective and productive for maintaining an increased  
frequency of services in keeping with the culture of an air taxi  
service.  The total value of acquisition of aircraft from 1995-2007 is  
estimated by aviation experts to be in the region of USD 7 billion.   As  
a spinoff of this growth, the Indian aviation industry (aircraft and  
parts manufacture) has also received a boost with a number of private  
manufacturers already making their mark in the arena of small aircraft  
(2-19 seaters) and small helicopters.    
  
B. On a scale of 1-5, Indian end users receptivity to U.S. products and  
services can be quantified at 4.  Although they do face intense  
competition from Europeans notably Airbus Industrie for large aircraft  
and assorted European manufacturers from France, Germany, Italy,  
Holland, and the U.K. for light and medium aircraft.  For very light to  
light aircraft (2-19 seater) India is in the process of establishing a  
vibrant domestic industry with both indigenous production and  
manufacture through collaborations with mainly European manufacturers.   
The public enterprise Hindustan Aeronautics Limited (HAL), which is an  
established manufacturer of Indian military aircraft, is in the process  
of commercializing manufacture of a light helicopter and is holding  
negotiations with international manufacturers for the commercial  
manufacture of an Indian version of a 100-seater aircraft.  Taneja  
Aerospace and Naras Aviation have established viable and competitive  
facilities for manufacturing, under technical collaboration, light  
commercial aircraft and helicopters.  Bharat Heavy Electricals (BHEL)  
and the National Aeronautical Laboratory (NAL) have developed trainers  
and light aircraft, commercial production of which has commenced and  
will be implemented within the next two years.     
  
Among U.S. suppliers, while Boeing has been the most active, McDonnell  
Douglas was absent from the Indian scene until recently when the company   
renewed its interest in India and is now one of the companies being  
considered by Air India for sourcing its next generation of medium  
capacity aircraft.  HAL and a few other domestic manufacturers are  
already established suppliers of aircraft parts to all the leading  
international manufacturers i.e., Boeing, Airbus and McDonnell Douglas.  
  
C.  Aviation turbine fuel is very expensive in India.  High fuel costs,  
coupled with the high landing fees, etc., have served to severely  
restrict the profitability of domestic air transport operators.  In  
addition, to protect Indian Airlines (the Government-owned domestic  
carrier) from a no-holds-barred competition from private operators, the  
Government allows private operators to import aircraft only on a case- 
by-case basis.  Further in keeping with global trends, domestic airlines  
in India are negotiating tie-ups with major international airlines for  
providing a single ticketing facility to international travellers in  
addition to  financial or technical joint ventures (e.g., the proposed  
TATA-Singapore Airlines joint venture TATA-SIA to operate private air  
services in India).  The prospect of future tie-ups do have a bearing on  
aircraft purchases by existing Indian air services.   
  
D. Apart from the periodic purchase of large aircraft by Air India and  
Indian Airlines the smaller airlines are interested in turbo props; 19  
seaters, 50 seaters etc.  In addition, cargo aircraft also have a niche  
market.  
  
List of most promising sub-sectors, with 1996 estimated market size of  
each sector:  
  
Subsector   (U.S. $ Million)  
  
Large  Aircraft      700  
Medium Aircraft      250  
Small Aircraft        50  
  
  
PART III:   DATA TABLE:   
  
                                  1994      1995      1996  
(est.)                                (U.S. $ Million)  
  
A.   Total Market Size            640       400       1020  
B.   Total Local Production      - 10        25             
C.   Total Export                  -          -        -    
D.   Total Imports                640       390        995  
E.   Imports from the U.S.        600       300        960  
  
Exchange rate: 1 USD equals:      31.00    31.20      33.00  
  
The 1996 imports include the four Medium Capacity aircraft that Air  
India will acquire.  The imports from the U.S. will be USD 960 million  
only if they (Boeing 777 or McDonnell Douglas MD-90) are acquired from  
the U.S.   
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I: BEST PROSPECTS   
  
Rank of sector:   2  
Name of sector:   TELECOMMUNICATIONS SERVICES/EQUIPMENT  
ITA industry code TES/TEL  
  
PART II:   NARRATIVE:   
  
A.  The September 1994 Telecom Policy announced by the Government of  
India's (GOI) Department of Telecom (DOT) set targets to ensure:  
availability of telephones on demand by 1997; all value added services  
to be made available at international quality standards; and all  
villages to have basic telephone services by 1997.  As of September  
1994, the DoT had installed about 10 million telephone lines to serve  
India's population of 900 million people.  This 0.9:100 ratio of  
telephones to population is among the lowest in the developing world.  A  
wait of three years for a telephone is standard.  The installation of a  
line for data communications in Bombay required almost two years,  
despite repeated requests and interventions with high officials of the  
telephone operating company.  
  
The demand for telephones has been forecast at 15.8 million connections  
by 1997 requiring installation of 7.5 million new connections during  
1995-97.  To provide these enhanced services the resource gap faced by  
the DOT exceeds USD 7.2 billion.  Consequently, the DOT, under its New  
Telecom Policy, will involve private sector participation.   
International competitive tenders for cellular mobile, radio paging, and  
basic voice telephone services were opened to the private sector.  While  
the Government requires that Indian citizens own at least 51 percent of  
telecom firms, the policy permits inclusion of East Asian, North  
American, and European equipment and service providers as minority  
partners.  Knowing that the Indian private sector has very limited  
experience in providing telecom services, the DOT mandated that tender  
bids should be made by Indian registered joint venture companies formed  
by the association of Indian companies with foreign firms having  
adequate experience which is separately stipulated for each tender.  
Consequently, a number of international companies have bid for the  
cellular tender with the maximum participation from U.S. companies.  A  
similar situation is expected for the basic services tender and also for  
providing value added services.  The reason for the strong affinity of  
Indian companies to form joint ventures with U.S. companies is that the  
U.S. is recognized as one of the leading telecom equipment, technology  
and service providers by Indian end users and the corporate clientele.   
Apart from the high acceptance of U.S. technology and equipment, the  
large number of Indo-U.S. joint ventures will provide a further fillip  
to procurement of U.S. origin equipment and technology.  
  
B.  On a scale of 1-5, Indian end users receptivity to U.S. telecom  
products and services can be quantified at 4.  The opening of the Indian  
telecom market has attracted intense competition from French, German,  
Swedish, Finnish, Japanese, Korean, Canadian, Australian, Singaporean,  
and Hong Kong firms.    
  
C.  In spite of the privatization of basic services, the DOT will remain  
as the major player.  Consequently, the GOI will have to ensure an  
impartial regulatory authority to ensure a fair deal to market operators  
providing services.   Customs tariff has been steadily reduced which  
together with economic and import liberalization has reduced trade  
barriers.  The growing liberalization and consequent increased growth  
rates of the Indian economy will further boost the demand for telecom  
technology and services which is a basic infrastructure requirement.  
  
D.    List of most promising sub-sectors, with 1996 estimated    market  
size of each sector:  
  
Subsector                (U.S. $ Million)  
  
Switching & Transmission    2500  
Equipment        
Value added services         400  
VSATs                        300  
  
  
PART III:   DATA TABLE:   
  
                                  1994      1995      1996  
(est.)                                 (U.S. $ Million)  
  
A.   Total Market Size           1199      3187      5550  
B.   Total Local Production       922      2250      3825  
C.   Total Export                  -         -         -   
D.   Total Imports                277       937      1725  
E.   Imports from the U.S.        105       356       731  
  
Exchange rate: 1 USD equals:     31.00     31.20    33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:   TITLE:   BEST PROSPECTS   
  
Rank of sector:     3  
Name of sector      COMPUTER SOFTWARE  
ITA industry code   CSF  
  
  
PART II:   NARRATIVE:   
  
A.   The Indian computer software industry is expected to grow at a  
compounded annual growth rate of 37 per cent and should reach  USD 1  
billion by 1998.  More than 60 per cent of India's software exports are  
directed to the U.S. market.  As a result, software development tools  
for design and engineering applications usually come from the U.S.     
  
B.   In addition, U.S. firms such as Cadence Design Systems, Digital  
Equipment Corporation, Hewlett Packard, IBM, Microsoft, Oracle, Texas  
Instruments, and others, have set up development centers in India to  
meet their in-house software requirements.  Bangalore's pleasant climate  
and wealth of technical talent have attracted many U.S. firms to that  
city.  Although no estimates are available, India's National Association  
of Software and Service Companies (NASSCOM) believes that the U.S. has a  
share of more than 70 percent of the Indian software market.  Products  
that have become standards are: Wordperfect Versions 5.1 and 6, Wordstar  
Version 3, Lotus 1-2-3, Novell's networking software, and Microsoft's  
MS-DOS.  
  
C.  The Government of India's policies for the industry are expected to  
provide help for the industry to realize the potential of  USD 2 billion  
production by 1998 (for exports and domestic industry sectors).  As  
India tries to become a global player and upgrade its manufacturing,  
imports are expected to be reduced further in the coming years.  
  
D.  List of most promising sub-sectors, with 1996 estimated market size  
of each sector:  
  
Subsector (U.S. $ Million)  
  
CAD/CAM/CAE            210  
Educational Services   130     
Networking Software    102     
Multimedia Software     65  
Maintenance of Data Bases   60  
  
  
PART III:   DATA TABLE:   
  
                                  1994      1995      1996  
(est.)                                   (U.S. $ Million)  
  
A.   Total Market Size            304.00    419.00    567.50  
B.   Total Local Production       553.00    763.00   1046.00  
C.   Total Export                 329.00    449.00    615.00  
D.   Total Imports                 80.00    105.00    136.50  
E.   Imports from the U.S.        226.00    283.00    397.25  
  
Exchange rate: 1 USD equals:       31.00     31.20     33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I: BEST PROSPECTS   
  
Rank of sector:   4  
Name of sector    ELECTRIC POWER GENERATION  
ITA industry code ELP  
  
  
PART II:   NARRATIVE:   
  
A.  India has a chronic shortage of electric power.  Industry experts  
estimate that to sustain current levels of industrial growth, India's  
current generating capacity of 76,700 Megawatts (MW) needs to be doubled  
in the next 10-15 years.  To bridge the gap between demand and supply,  
private participation has been invited in over 200 new projects.   The  
Government's decision in 1991 to open electric power generation to  
direct foreign investment was a fundamental pillar of its economic  
opening package.  The Government acted after calculating that at then- 
current levels of investment there would be a considerable unsatisfied  
demand in future, lowering the rate of economic development in India.    
  
In response to the decision to open the power sector to foreign direct  
investment, major construction engineering, generating equipment  
suppliers, and independent power project developers from around the  
world began to visit India.  The single largest participation so far has  
been from the U.S.  Of the 35 overseas proposals pending with the  
Government, U.S. firms contend for 22.  Guarantees have been granted by  
the Government of India to two U.S.-led projects: Dabhol in Maharashtra  
and the Ib Valley in Orissa.  U.S. firms are in a unique position to  
address India's power needs, because of their capabilities in developing  
electric power internationally.  
  
B.   The prices quoted by U.S. firms for developing power projects and  
supplying electric power compare favorably with those proposed by  
domestic companies for similar projects; in some cases, the U.S. prices  
are even lower.  U.S. firms have an edge as they have access to  
competitive and innovative project financing.  As a result, the Indian  
market was highly receptive to the U.S. electric power generation  
products and services from 1991-95.  In recent months, the campaign of  
the new ruling coalition in Maharashtra against the Dabhol project of  
Bechtel, Enron, and GE has created anxiety for U.S. and other foreign  
power firms.  Competition from Swiss, German, Japanese, Korean, and  
other major competitors for power projects is intense.  Domestic  
suppliers of heavy equipment and capital goods fear that foreign  
investment will reduce or eliminate their business in the future.  
  
C.   Coal is the major fuel for India's power sector.  It provides for  
more than 70 percent of the generating capacity.  However, shortages,  
transportation delays, and the low thermal quality of coal supplies to  
power plants disrupt generation and reduce average plant load factors.   
The all-India average plant load factor (PLF) for thermal plants was 61  
percent in 1994.  Transmission and distribution (TD) losses in India are  
high, in the range of 20-23 percent.  State Electricity Boards (SEBs)  
generate and distribute power, set tariffs and collect revenues.   
Therefore, private investors have reservations because they can control  
neither output prices, nor distribution and revenue collections.  The  
SEB's suffer from chronic financial problems due to rising generating  
costs, subsidies for agricultural use of electricity, and non-payment of  
electric bills.  Their revenues are being eroded by pilferage, bad  
debts, and supply of power at subsidized rates.    
  
India's notoriously erratic power supply has severely affected  
industrial growth in most regions of the country.  Manufacturers and  
large service companies must install back-up diesel generating units.   
Delicate electronic machinery must be used with voltage stabilizers to  
prevent damage.  Computer systems require uninterruptible power systems  
(UPS).  Unless efficiency is stepped up and more private sector plants  
are allowed entry, the present system, already under severe pressure, is  
bound to become even worse.  
  
D.  Strong measures are needed to improve the low PLF, the imbalance in  
the mix of energy generating sources, and the high rates of TD losses.   
Renovation, technological up-grading, and improved maintenance of  
existing capacity can create additional generating capacity.  In March  
1995, the Government estimated that each percentage point improvement in  
the average PLF of thermal plants would effectively add 390 MW of  
generating capacity per annum at a cost of about USD 400 million.  
  
The potential to conserve generated power is 20-30 per cent of the total  
energy consumption, or about 5,000 MW per annum.  In the industrial  
sector, the maximum energy is consumed by the steel industry, followed  
by the chemical and process industries.  Energy efficient furnaces for  
the steel industry and pumps and electrical resistors for the chemical  
and process industries have excellent market potential.  Energy  
efficient lighting devices and energy demand management techniques have  
good market potential.  The market potential for distribution  
transformers, capacitors and other energy-saving devices to minimize  
losses is excellent.  
  
  
List of most promising sub-sectors, with 1996 estimates market size of  
in each sector:  
  
Subsector                   (U.S. $ Million)  
  
Power Transmission Equipment    418  
Energy efficient pumps          375  
Capacitors                      350  
Incandescent bulbs              150  
  
  
PART III:   DATA TABLE:   
  
The provision of a data table is not possible at this time because  
several new power projects are awaiting Government clearance even though  
MOU's have been signed with the Government.  
  
Note:   The above statistics are unofficial estimates.  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     5  
Name of sector      URBAN MASS TRANSPORTATION  
ITA industry code   TRN  
  
PART II:   NARRATIVE:  
  
A.   Since 1991, the Government of India has given high priority to  
develop the infrastructure sector with private sector participation,  
including direct foreign investment.  Projects at the National and State  
level, including the construction of roads, airports, seaports, power  
plants and rapid transit systems are attracting foreign interest.    
  
With the phenomenal growth of traffic in India, the Mass Rapid Transport  
System (MRTS) and the Light Rail Transit (LRT) system are being  
introduced in a phased manner to overcome a great degree of traffic  
congestion.  Since  the U.S. has successfully launched state-of-the-art  
metro rails, U.S. design and engineering companies have excellent  
prospects to compete in all  future urban mass transit projects in  
India.    
  
B.  U.S. companies bidding for the MRTS projects will face tough  
competition from Japan, Korea, Canada, Sweden, and Germany.  So far no  
U.S. company has bid for New Delhi's MRTS project.  However, U.S.  
companies should bid for the upcoming MRTs projects in the State of  
Rajasthan and Punjab.  
  
C.  The share of 'road transport' in total traffic has been steadily  
increasing over the years, at the cost of the Indian Railways.  At  
present, the share of road transport in passenger traffic is an  
estimated 80 percent and in freight traffic it is 55 percent.   
  
The total number of registered motor vehicles in India has risen from  
300,000 in 1951 to 2.5 million in 1993, which is more than an eighty- 
fold increase.  There was a steep rise in traffic density from 77 and 85  
in 1951 to 1150 and 2897 in 1993 respectively.    
  
India's middle class population and consequently its travel demands have  
been increasing at geometric rates of progression in urban areas.  In  
many of the cities, the vehicle population has reached alarming  
proportions in relation to the limited road network available.  Given  
the high density of population and scarcity of land, it is almost  
impossible in many cities to increase the road capacity substantially.      
  
The Government of the National Capital Region of Delhi is considering  
the introduction of a High Speed Tram System (MRTS) with the assistance  
of private participation.  The Government of India has approved, in  
principle, the implementation of the multi-nodal MRTS for New Delhi.   
The 1995 estimate of such a project's cost is USD 3,000 million.  A  
joint venture of the Union Government of Delhi and the Overseas Economic  
Cooperation Fund (OECF) of Japan named 'Delhi Metro Rail Corporation'  
was registered on May 3, 1995.    
  
Global tenders were floated on January 16, 1995, for the first phase of  
the USD 1,400 million four-phase Light Rail Transit (LRT) project for  
Bangalore city in the southern Indian state of Karnataka.  The project  
will be implemented by the Karnataka Government jointly with a  
consortium of Indian and foreign firms.    
  
D.  List of most promising sub-sectors, with 1996 estimates market size  
of in each sector:  
  
Subsector             (U.S. $ Million)  
  
Supply of Equipment         50  
Design & Consultancy        25  
  
  
PART III:   DATA TABLE:  
  
A data table is not meaningful for this sector, as proposed projects are  
in the design stage and not yet implemented.  
  
Note:  The above statistics are unofficial estimates.  
  
  
PART I: BEST PROSPECTS   
  
Rank of sector:   6  
Name of sector    INDUSTRIAL CHEMICALS  
ITA industry code CHM  
  
  
PART II:   NARRATIVE:  
  
A.  The 1994 production value of the Indian chemical industry is  
estimated at USD 17 billion.  Industrial chemicals account for 20  
percent of this market.  The market growth of industrial chemicals is  
estimated at 14-16 percent per annum for the next five years.  Imports  
account for 16 percent of the total market.   
  
B.  American companies have a strong market presence in this sector.   
All major U.S. manufacturers including Eastman Chemicals, Dow Elanco,  
FMC Corporation and Dupont have representative offices in India.  Other  
major U.S. chemical manufacturers have agents or distributors.  
   
C.  The Indian customs tariff for chemicals was reduced from 65 to 50  
percent in April 1995.  In most cases the reduction in customs duty has  
not affected the  prices of indigenous products because these are priced  
lower than imported chemicals.  As and when international prices of  
chemicals decline, Indian manufacturers reduce their prices.   
  
D.  List of most promising sub-sectors, with 1996 estimates market size  
of in each sector:  
  
Subsector               (U.S. $ Million)  
  
Organic Chemicals            1600  
Inorganic Chemicals          1100  
Perfumery Chemicals           600  
Fine Chemicals                250  
  
  
PART III:   DATA TABLE:   
  
                                  1994      1995      1996  
                                      (U.S. $ Million)  
  
A.   Total Market Size             2980     3408       3960  
B.   Total Local Production        2742     3132       3640  
C.   Total Export                   252      284        360  
D.   Total Imports                  490      560        680  
E.   Imports from the U.S.          157      195        215  
  
Exchange rate: 1 USD equals:   31.00   31.20   33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:   7  
Name of sector    PLASTIC MATERIALS & RESINS  
ITA industry code PMR  
  
  
PART II:  NARRATIVE:  
  
A.  Prior to the liberalization of the Indian economy, the Indian  
plastics and resins industry was operating in a closed environment.   
Today, after four years of opening of the Indian economy this sector has  
been affected by market forces operating internationally.  Demand for  
plastics and resins in the Indian market is expected to increase to keep  
pace with trends in other Asian markets.  The use of plastic materials,  
which are replacing several traditional products, is set to increase in  
the future.  The average growth rate projected for this sector is 16-20  
percent annually.  Consequently, the import share is expected to  
increase.  
  
B.  American companies have a strong market presence in India.  The  
major U.S. manufacturers of plastics and resins, including Mobil, Dow  
Chemical, Dupont and FMC have opened representative offices in India.   
Traditionally, the U.S. has been a major supplier of plastics and resins  
to the Indian market.  The opening of liaison offices in India in the  
last four years has helped these U.S. firms to deal directly with the  
end-users and increase their presence in this growing market.  
   
C.  Indian customs tariff on plastics and resins has been reduced from  
65 percent to 40 percent in the recent Budget announced in March 1995.   
The benefit will accrue to the Indian companies which have been paying  
import duties added to the international prices of these products.  The  
end-users of plastics and resins have a wider choice now as lower  
tariffs permit international companies to offer competitive rates to  
buyers.  With only two major petrochemical complexes coming up by the  
year 2000, dependance on imports will continue up to such time in this  
sector.  
  
D.  List of most promising sub-sectors, with 1996 estimated market size  
of each sector:  
  
Subsector                     (U.S. $ Million)  
  
Commodity Plastic & Resins        3800  
Engineering Plastics & Resins      320  
Thermosets                         200  
  
  
PART III:   DATA TABLE:   
  
                                  1994      1995      1996  
                                        (U.S. $ Million  
  
A.   Total Market Size            3390      3835      4240  
B.   Total Local Production       1590      2020      2180  
C.   Total Export                  280       295       380  
D.   Total Imports                2080      2110      2440  
E.   Imports from the U.S.         115       156       210  
  
Exchange rate: 1 USD equals:      31.00     31.20    33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:   8  
Name of sector    COMPUTERS AND PERIPHERALS  
ITA industry code CPT  
  
PART II:   NARRATIVE:  
  
A.  All major U.S. computer companies are represented in the market.   
Hewlett Packard, in collaboration with HCL Limited, is the Indian market  
leader, closely followed by Wipro Infotech, distributors of Sun  
Microsystems and Apple Computers.  Digital Equipment India Limited, a  
joint venture between Digital Equipment Corporation and the Hinditron  
Group, also increased its market share.  IBM, Compaq, Silicon Graphics,  
and Dell Computers, who entered the Indian market recently, also have  
growing market shares.    
  
B.  Competition comes mainly from domestic companies such as Wipro  
Infotech, Apollo Computers, Sterling Computers, and others.  These  
companies manufacture or assemble PC's using indigenous technologies and  
electonic components imported from Singapore, Korea, Taiwan or other  
Southeast Asian nation.  
  
The peripherals market is also dominated by U.S, companies which are  
either represented or have collaborative agreements with their Indian  
counterparts.  
  
C.  The computer hardware and peripheral markets faces a shrinkage in  
Government orders, which otherwise accounted for a major share of demand  
in the domestic PC market.  Aggressive efforts in selling to the private  
sector, especially the corporate sector, needs to be made in order to  
offset this decline in government purchases.  There is also limited  
potential in sales to educational institutions.  
  
The Indian computer hardware industry grew at an average rate of 35 per  
cent over the previous year.  However, in number of units sold, domestic  
sales of personal computers jumped by over 66 percent over 1993-94 to  
250,000 units.  Hardware and peripherals sales are estimated to grow by  
23 percent again in 1995.   In 1994, they posted sales of USD 1,334  
million compared to  USD 1,085 the previous year, an increase of 23  
percent.  
  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR        (U.S. $ Million)  
  
Computers              749  
Data Acquisition    
Systems                220  
Peripherals            195  
Add-ons                170  
  
  
PART III:   DATA TABLE:   
  
  
  
                                  1994      1995      1996  
                                       (U.S. $ Million)   
  
A.   Total Market Size           1085      1334      1668  
B.   Total Local Production       876      1102      1410  
C.   Total Exports                116       158       210  
D.   Total Imports                325       390       468  
E.   Imports from the U.S.        104       130       164  
  
Exchange Rates used:US $1=Rs.    31.00     31.20     33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:   TITLE:   BEST PROSPECTS   
  
Rank of sector:     9  
Name of sector      MINING & MINERAL PROCESSING EQUIPMENT  
ITA industry code   MIN  
  
  
PART II:  NARRATIVE:  
  
A.  India's vast mineral sector, comprising coal, ferrous and non- 
ferrous minerals, was predominantly state-controlled until recently.  
However, as a result of its New Mineral Policy (1993), the Government of  
India (GOI) is encouraging Indian and foreign  private investment in the  
mining and processing of most non-fuel minerals. These include: iron  
ore, manganese, chromite, copper, lead, sulphur, zinc, gold, platinum  
and diamonds.  The GOI will allow foreign ownership of up to 50 percent  
for mining of these minerals, and it is prepared to raise that limit for  
captive mines of companies processing the minerals based on imported  
technology. Apart from this, India's vast coal mining industry, which is  
still under the GOI's control, is in dire need of equipment  
modernization and expansion to cater to the needs of new thermal power  
plants and coke-ovens being set up in the near future. With the rising  
investments in government/private-owned mines and new mineral processing  
units, the demand for the latest equipment and technology from overseas,  
particularly the U.S., should grow rapidly during the rest of this  
decade and well beyond.  
  
B.  Despite the huge potential, the Indian mining and mineral processing  
industry had not been a big market for U.S. exporters, owing to GOI's  
preference for getting equipment under tied loans or bilateral aid  
programs offered by U.K., Germany, Japan and (to a lesser degree) by the  
former Soviet Union. However, given the recently liberalized Mineral  
Policy of the Government and 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.   
  
C.  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, the Asian Development Bank (ADB) and other  
multilateral financing agencies.  
  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR               (U.S. $ Million)  
  
Sedimentation Equipment       350  
Mine Locomotives              215  
Mineral Crushers & Grinders   145  
Excavators, Shovels, etc.     100  
Walking Draglines              90  
Longwall Loader Systems        70  
Coal/Rock Cutters              60  
Mine Communications Equipment  40  
Mineral Screening, Washing,  
Flotation/Separation &  
  
  
PART III:   DATA TABLE:   
  
  
                                       1994      1995     1996  
(est.)                                      (U.S. $ Million)  
  
A.   Total Market Size                  765      895     1075  
B.   Total Local Production             535      625      750  
C.   Total Exports                       30      50        80  
D.   Total Imports                      260      320      405  
E.   Imports from the U.S.               35      60       105  
  
Exchange Rates used:US $1=Rs.           31.00   31.20    33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     10  
Name of sector      IRON & STEEL PLANT EQUIPMENT AND SERVICES  
ITA industry code   IRN  
  
  
PART II:   NARRATIVE:  
  
A.  During the last four decades, the iron and steel industry in India  
made significant progress, even though it was regulated and controlled  
by the Government of India (GOI).  Of the seven large integrated iron  
and steel plants in the country, the GOI owns six and the private-sector  
(Tata Group) owns only one.  The Tata steel plant, though among the  
oldest in India, is also among the most profitable steel plants in  
India. The seven integrated plants use the Blast-Furnace & L.D./Basic- 
Oxygen Furnace (BF-LD/BOF) process.  Taken together, they produce about  
9.5 million Metric Tons (MTPA) of steel per annum.  There are nearly 160  
medium/mini-steel plants in the private sector producing a total of  
around 7.5 million MTPA of steel by the Direct-Reduced Iron and  
Electric-Arc Furnace (DRI-EAF) process. A third tier of about 550 small  
units, using arc/induction furnaces to melt steel scrap, produce a total  
of 1.5 million MTPA of steel castings and other related products.  
Although the grand total of 18.5 million MTPA places India among the top  
ten producers of steel in the world, the per capita steel production of  
only 26 Kg/person is much below the world average of 150 Kg per capita.  
  
B.  Despite the huge potential, the Indian steel industry has not been a  
big market for U.S. equipment suppliers, owing to the fact that during  
1955-75 all the large integrated steel plants of GOI were built under  
tied loans or bilateral aid programs offered by the U.K., Germany and  
the former Soviet Union. The equipment and spares were also supplied by  
manufacturers in those countries, and later on some of the technology  
for remanufacture/repairs of equipment was passed on to Indian  
companies. However, given the recently liberalized policies of the GOI  
and private entrepreneurs investing in new iron and steel plants here,  
the opportunity for U.S. firms to enter the Indian market through joint  
ventures and technical collaborations has grown immensely.  
  
C.  With the present liberalization of the country's economy, demand for  
steel in India is fast outstripping domestic production capacity. It is  
estimated that the demand for finished steel in India will be over 38  
million MTPA by the year 2000 and may cross 55 million MTPA by 2010. To  
meet that demand, the GOI has encouraged private Indian and foreign  
investments in the iron and steel industry to build new plants and  
modernize the existing ones. Therefore, unprecedented opportunities will  
be created for U.S. suppliers of iron and steel mill equipment which the  
Indian industry considers to have the best technology.  
  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                      (U.S. $ Million)  
  
Continuous Slab/Billet     
Casters, Ladles, etc.                 350  
Hot-Rolling & Cold-Strip  
Rolling Mills etc.                    240  
L.D.\B.O.F. Converters                200  
Process Control Instruments           100  
Special Refractory items               75  
  
  
PART III:   DATA TABLE:   
  
                                       1994     1995     1996  
                                           (U.S. $ Million)  
  
A.   Total Market Size                  685      805      970  
B.   Total Local Productionn            395      475      590  
C.   Total Exports                       25       35       50  
D.   Total Imports                      315      365      430  
E.   Imports from the U.S.               30       55       90  
  
Exchange Rates used:US $1=Rs.          31.00     31.20  33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:   TITLE:   BEST PROSPECTS   
  
Rank of sector:     11  
Name of sector      OIL/GASFIELD EQUIPMENT AND SUPPLIES  
ITA industry code   OGM  
  
  
PART II:   NARRATIVE:  
  
A.  The Indian oil and gas sector is in for major expansion and growth.   
As a matter of fact, the Government of India is keen to import the  
latest technology and map a viable exploration program to help the oil  
and gas industry meet the expected demand of 149 million tons of crude  
oil by the year 2010.  A rule-of-thumb among development economists is  
that annual 6 percent GDP growth requires annual 9 percent growth in  
energy consumption.  The Sunderrajan Committee report "Hydrocarbon  
Perspective: 2010" submitted to the Government in April 1995 recommends  
further decontrol and opening up of the oil and gas sector.  This will  
open up new opportunities for foreign companies in the oil and gas  
business in India.  
  
B.  American companies already have a strong market presence in India.  
The major U.S. oil exploration companies have set up their offices in  
New Delhi.  Enron Oil Exploration is the first foreign oil company to  
have signed a production sharing contract with the Government-owned oil  
company, the Oil & Natural Gas Commission Limited (ONGC).  Since the  
Indian industry uses American Petroleum Institute (API) specifications  
for this sector, U.S. manufacturers have an edge over the rest of the  
oil and gas equipment manufacturers.  
  
C.  The Indian Government has decided to attract both the Indian private  
sector and foreign oil exploration companies into the Indian market by  
offering exploration blocks in promising areas.  The liberalization of  
this vital sector with comparatively no opposition is a welcome feature,  
meaning that the country, as a whole, recognizes the need for foreign  
investment in this core area for the rapid development of Indian  
industry.  Given India's energy shortages and the foreign exchange costs  
of importing fuel, there is a powerful economic incentive toward  
welcoming foreign direct investment in this sector.  This development  
over time is likely to reduce the import bill as oil imports account for  
over 35 percent of India's total import bill.  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                                          (U.S. $ Million)  
  
Seismic Survey Equipment and Services                    1275  
Offshore/Onshore Drilling Equipment                       900  
Offshore Logistical Support Services & Equipment          550  
  
  
PART III:   DATA TABLE:   
  
                                     1994   1995   1996  
                                       (U.S. $ Million)   
  
A.   Total Market Size               2540      2990      3570  
B.   Total Local Production          3150      3780      4460  
C.   Total Exports                    840      1080      1230  
D.   Total Imports                    230       290       340  
E.   Imports from the U.S.             42        60        80  
  
Exchange Rates used:US $1=Rs.   31.00   31.20   33.00  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     12  
Name of sector      FOOD PROCESSING & PACKAGING EQUIPMENT  
ITA industry code   FPP  
  
  
PART II:  NARRATIVE:  
  
A.  The Food Processing and Packaging (FPP) machinery market in India  
offers excellent business prospects for U.S. companies.  Both domestic  
production and imports of FPP are expected to expand during the next  
three to five years.  
  
A provisional market size estimate of FPP machinery was USD 428 million  
for 1994, inclusive of USD 117 million of imports.  The market size is  
estimated to increase to USD 551 million in 1995 and to USD 710 million  
in 1996.  Both imports and local production will increase by an average  
of 25 percent or more.  The Indian food processing sector is currently  
undergoing rapid transformation into a high volume industry catering to  
both the export market and the expanding domestic market.  The growth of  
urban consumers and working women is expected to stimulate development  
of the food products sector.  
  
B.  Indian imports of FPP consist of advanced FPP machinery and systems.   
The major FPP suppliers to the Indian market are Germany, with a 35  
percent share of the import market, followed by the U.S. with 28  
percent, the U.K. and Sweden with 13 percent each, Italy with 5 percent,  
and others, including Japan, with the remaining 11 percent.  
  
U.S. firms could enter the Indian market through competent agents and  
distributors, authorized to sell FPP machinery, or through joint venture  
manufacturing tie-ups with Indian partners.  Agents should have  
engineering competence to offer a strong service support to their  
customers.  As a long term strategy, U.S. firms should establish joint  
venture arrangements to manufacture FPP equipment for the domestic  
market.    
  
C.  The Government of India's (GOI) policies support the food processing  
and packaging industries.  The GOI provides automatic approval and up to  
51 percent equity to foreign firms to establish food processing and  
packaging industries.  In 1991, the Foreign Investment Promotin Board  
granted Kellogg's approval to invest in a ready-to-eat-cereal plant in  
Taloja, Maharashtra.  The introduction of Kellogg's corn flakes (the  
corn comes from Andhra Pradesh), Kellogg's wheat flakes (the wheat comes  
from Rajasthan and north India), and Kellogg's Basmati Rice Flakes (the  
rice comes from the Punjab), has been a very successful product launch.  
The FPP machinery related to dairy products, processed foods,  
vegetable/fruit processing, edible oils, and confectionery are well  
received in the Indian market.  
  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                        (U.S. $ Million)  
  
Food Processing Equipment            395  
Food Packaging Equipment             270  
  
PART III:   DATA TABLE:   
  
                                         1994      1995      1996  
                                         (U.S. $ Million)  
  
A.   Total Market Size                    428      552      711  
B.   Total Local Production               336      435      562  
C.   Total Exports                         25       29       34  
D.   Total Imports                        117      146      183  
E.   Imports from the U.S.                 29       36       45  
  
Exchange Rates used: US $1=Rs.           31.00    31.20   33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     13  
Name of sector      HAZARDOUS WASTE MANAGEMENT  
ITA industry code   POL  
  
  
PART II:   NARRATIVE:  
  
A.  The Hazardous Waste (Management and Handling) Rules 1989 introduced  
under the jurisdiction of the Environment Protection Act 1986 mandate  
the use of specialized equipment and services for storage, handling,  
treatment, transportation and disposal of hazardous wastes.  Guidelines  
for the management and handling of hazardous wastes have been stipulated  
by the Ministry for Environment & Forests.  There are an estimated 4,000  
hazardous waste units in 1,000 industrial estates in 11 major states:  
Gujarat, Maharashtra, Tamil Nadu, Kerala, Andhra Pradesh, Karnataka,  
Uttar Pradesh, Haryana, Punjab, Delhi and West Bengal.  The demand for  
hazardous waste identification, storage, packaging and related emergency  
equipment is expected to rise dramatically in these states.    
  
B.  India has 350-400 pollution control equipment manufacturing and  
environmental consultancy companies.  Over 100 companies in India have  
associated with international companies for joint ventures and  
technology transfers for various types of pollution control equipment.   
U.S. companies face stiff competition from German, Dutch, Japanese,  
Italian and Canadian companies.  They do have a substantial market  
presence and have a positive reputation among Indian industry.  An  
increasing number of Indian companies are seeking U.S. expertise in  
hazardous waste management.   The U.S. has a leading edge in  
environmental technologies and has vast expertise in solid-liquid  
hazardous waste treatment technologies and equipment.  
  
C.  The issues impacting the market are as follows:  
  
1.  Major investments in the chemicals, fertilizers, pharmaceuticals and  
petrochemicals sectors are increasing demand for solid and liquid  
hazardous waste handling-treatment equipment and technologies.   
  
2.  Major companies are setting environment management systems in place  
with ISO 14000 to be implemented by 1995-96.   
  
3.  Stricter enforcement of the regulations by State Pollution Control  
Boards, due to community pressure as public awareness increases.  
  
4.  Public awareness and non-governmental organization (NGO) pressure on  
environment related issues.  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                     (U.S. $ Million)  
  
Spill Control Systems               45  
Communication and alarm Systems     42  
Fire Extinguishing systems          25  
Decontamination systems             15  
  
  
PART III:   DATA TABLE:   
  
                                     1994       1995       1996  
                                        (U.S. $ Million)  
  
A.   Total Market Size                91.0       132      155  
B.   Total Local Production           62.0        83      100  
C.   Total Exports                     6.8        12       20  
D.   Total Imports                    35.8        61       75  
E.   Imports from the U.S.            13.0        28       45  
  
Exchange Rates used: US $1=Rs.        31.00     31.20    33.00  
  
Note:   The above statistics are unofficial estimates.  
  
Note: Indian companies in the hazardous waste management business prefer  
to have a joint venture or technology transfer with international  
companies as they have attained a reasonable capability to manufacture  
equipment in India.  They prefer to import only the core components from  
the U.S. Joint venture or technology transfer partner.  Direct imports  
for this industry sector can come in the form of storage containers made  
of or lined with materials which are compatible with the waste category,  
Polyethylene packaging carboys, 200 liter steel clamp-lid containers,  
emergency equipment like fire extinguishing systems, spill control  
equipment, communications and alarm systems, and decontamination  
equipment.  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     14  
Name of sector      BROADCAST, CABLE & SATELLITE EQUIPMENT  
ITA industry code   TEL  
  
  
PART II:   NARRATIVE:  
  
A.  The broadcast, cable and satellite equipment market in India,  
including of radio/television transmission equipment, studio/production  
equipment, and satellite/cable television equipment, is witnessing   
remarkable growth.  Radio and television transmission is still  
controlled by Government of India (GOI) agencies, including All India  
Radio and Doordarshan (television).  During the last four years, there  
has been a virtual explosion in satellite/cable television by private  
Indian and foreign television broadcasters.  This has not only resulted  
in a substantial market for satellite/cable television equipment, but  
also for studio/production equipment since the programs/software  
required by Indian television companies are primarily produced in India.   
With India's recently liberalized trade and investment policies, the  
business climate is favorable now for U.S. firms to either enter or  
increase their presence in the market.  
  
B.  The U.S., with an estimated 25 percent of the import market, is very  
strong in the test and measuring instrument and analyzer segments.  
Though U.S. equipment is generally more expensive than comparable  
European and Japanese equipment, it enjoys an excellent reputation for  
its advanced technology, quality and performance.  For the U.S. to  
increase its market share, U.S. suppliers should adopt the more  
aggressive, sustained and flexible marketing practices of competitive  
third country suppliers.  Improved packages of trade financing or co- 
production arrangements with leading Indian firms would also help  
increase U.S. sales in this sector.      
  
C.  The market for radio/television studio/production equipment and  
satellite/cable television equipment will continue to expand rapidly.   
Although only about 10 million Indians have telephones, cable TV is said  
to reach up to 20 million households all over the country.  Indian  
movies have proved immensely popular with viewers, and direct-to-home  
broadcasting is poised to expand rapidly.  The growth rate of the  
transmission equipment market will depend in part on the pace of the  
Government's willingness to allow uplinks from Indian earth stations to  
geostationary satellites with South Asian footprints.  As of June 1995,  
the Government prohibits private broadcasters from installing their own  
uplink facilities.    
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                         (U.S. $ Million)  
  
Radio/Television Studio                  95  
Satellite/Cable T.V. equipment           80  
  
PART III:   DATA TABLE:   
  
  
                                     1994     1995      1996  
                                        (U.S. $ Million)  
  
A.   Total Market Size              154.80     205.00      250.00  
B.   Total Local Production          60.80      75.00       90.00  
C.   Total Exports                    4.50       6.00        7.00  
D.   Total Imports                   98.50     136.00      167.00  
E.   Imports from the U.S.           24.50      35.00       42.00  
  
Exchange Rates used: US $1=Rs.       31.00      31.20       33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     15  
Name of sector      MEDICAL ELECTRONICS AND CONSUMABLES  
ITA industry code   MED  
  
PART II:  NARRATIVE:  
  
A.  In view of the rapid increase in India's population and inadequacy  
of medical facilities, the Planning Commission budgeted  USD 781 million  
in 1994-95 for the Health and Family Planning Sector. For the current  
Indian fiscal year (1995-96) a provision of  USD 800 million has been  
made. A number of new hospitals, nursing homes and private clinics will  
be set up in the country. The rise in the number of medical facilities  
is likely to increase U.S. exports to India of MED from USD 31 million  
in 1994 to  USD 41 million in 1996.  Future growth is projected at an  
annual growth rate of 20 percent.  
  
Indian users are increasingly aware of the state-of-the-art medical  
electronics and consumables available in world markets.  Leading Indian  
doctors attend medical conferences from time to time in the U.S.A., U.K.  
and Japan and keep abreast of the latest technologies in this sector.   
Even when indigenous equipment is available, end-users opt for imported  
equipment, featuring higher performance and superior characteristics.  
Purchasers are willing to pay higher prices for sophisticated medical  
electronics and consumables.     
  
B.  The biggest segment, constituting 40 to 45 percent of the total  
market, is the imaging systems segment consisting of equipment like X- 
rays, CT scanners and MRI machines. This segment is dominated by  
Siemens, followed by Wipro-GE, Phillips, Inchem ATL, Network-Pickers,  
Toshiba-STM and Toshniwal. The second biggest segment, cardiology, is  
equally crowded with large and small players like Hewlett Packard,  
Indchem, Larsen and Toubro, BPL, Hinditron, Toshbro and Torrent, each  
vying for market share.  
  
U.S. companies wishing to enter the Indian medical electronics and  
consumables market should keep in mind that Indian end-users place a  
very high degree of importance on the vendor's reputation for quality  
service. Technical support required after the equipment is installed is  
a factor which is increasingly affecting the competitiveness of  
companies in the Indian market.  
  
It is advisable for U.S. companies to open their branch offices in India  
and maintain close contact with government officials and decision  
makers, obtain advance information regarding potential business, handle  
trade promotion activities and keep their head offices abreast of local  
market opportunities, conditions and competition.  
  
C.  The Indian Medical Electronics and Consumables industry has grown  
rapidly in the last few years in view of the increased demand for  
medical electronics and consumables, registering an average annual  
growth rate of 20 percent. The total market for medical electronics and  
consumables in 1994 was  USD 129 million and is estimated to rise to USD  
160 million in 1995.   
Next year the market is estimated to increase to USD 182 at an average  
annual growth rate of 20 percent. U.S. exports in 1994 were in the range  
of  USD 31 million. They are expected to rise to USD 36 million in the  
current year. Next year U.S. exports are estimated to rise to  USD 41  
million. Leading U.S. companies active in India include: GE, Hewlett  
Packard, Pickers and Torrent.  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                        (U.S. $ Million)  
  
Medical Imaging Equipment                60  
Cardiology Equipment                     50  
Laboratory instruments/Supplies          40  
Cancer Diagnostic &Treatment Equipment   20  
  
  
PART III:   DATA TABLE:   
  
                                       1994       1995       1996  
                                             (U.S. $ Million)  
  
A.   Total Market Size                  129       160        175  
B.   Total Local Production              55        67         69  
C.   Total Exports                        3         3          3  
D.   Total Imports                       77        96        109  
E.   Imports from the U.S.               31        36         41  
  
Exchange Rates used: US $1=Rs.         31.00      31.20     33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  BEST PROSPECTS   
  
Rank of sector:     16  
Name of sector      AVIATION EQUIPMENT & SERVICES  
ITA industry code   APG/AVG  
  
  
PART II:   NARRATIVE:  
  
A.  Civil aviation in India is estimated to grow at 8 percent annually.   
Both domestic and international passenger traffic will increase.  To  
cater to this growth, the Civil Aviation Ministry plans to develop,  
upgrade and modernize facilities at 15 airports in India including all  
international airports.  The modernization of international airports in  
Bombay and Delhi has already begun.    
   
U.S. suppliers are involved in the modernization of Air Traffic Controls  
(ATC) at Bombay and Delhi airports. (As of June 1995, this work is  
almost completed).  The ATC modernization of the remaining international  
airports will cost approx. USD 90 million; the import content being  
approx. USD 35 million.  Although U.S suppliers involved in the ongoing  
modernization of Bombay and Delhi airports may have initial advantages  
in supplying U.S.-made equipment, imports will progressively decline as  
the Indian Government is keen to start Indian production of ATC  
equipment.  Of the total estimated investments of approx. USD 450  
million (in the next five to seven years) for development of airports,  
ground handling (including cargo handling) and air terminal facilities,  
the component comprising land, terminal buildings, equipment, etc.,  
would be procured domestically or be of indigenous content.  Some  
specialized handling equipment and facilities comprising approx. USD 50- 
60 million would have to be imported.     
  
B.  On a scale of 1-5, Indian end users receptivity to U.S. APG/AVS can  
be quantified at 3 although they do face intense competition from  
Europeans notably French, German & British and from the Japanese and  
Canadians to some extent for products and technology.  
  
C.  Customs tariff has been steadily reduced which together with  
economic and import liberalization has reduced trade barriers.  The  
growing liberalization and consequent increased growth rates of the  
Indian economy will further boost the demand for air transport both for  
the domestic and international sectors.  This growth in traffic will  
require additional investments in aviation equipment and handling  
services for air traffic safety and customer convenience.  Privatization  
of airports and airport handling facilities are bound to follow as a  
result of constraints in government financing.   However, political  
considerations will determine the timing and extent of this shift.  
  
D.  List of most promising subsectors, with 1996 estimated market size  
of each subsector:  
  
SUBSECTOR                      (U.S. $ Million)     
  
Air Traffic Control                   90  
Private Sector participation  
in building new airports on a  
BOT basis                             30  
Specialized ground handling  
& Terminal Equipment                  25  
  
  
PART III:   DATA TABLE:   
  
                                   1994      1995      1996  
                                          (U.S. $ Million)  
  
A.   Total Market Size               86       100      190  
B.   Total Local Production          56        65      140  
C.   Total Exports                    -         -        -  
D.   Total Imports                   30        35       50  
E.   Imports from the U.S.           21        25       32  
  
Exchange Rates used: US $1=Rs.     31.00     31.20   33.00  
  
Note:   The above statistics are unofficial estimates.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:      TELECOMMUNICATION EQUIPMENT AND SERVICES  
ITA Industry Code:   TEL  
  
  
PART II:   NARRATIVE:  
  
With a population of 900 million people and a teledensity of just one  
telephone per hundred people there is a substantial unsatisfied demand  
for telecommunications in India.  Basic voice service is the largest  
opportunity.  Installing 27 million direct exchange lines by the year  
2000 will require an investment of USD 22 billion.  The investments  
required from 1995-2000 to  meet the demand for mobile cellular and  
radio paging services are estimated to be USD 8 billion and USD 1  
billion respectively.  Investments required to provide other value added  
services from 1995-2000 are estimated to be USD 3.5 billion.  As  
indicated above, USD 22 billion is required for direct exchange lines.   
This level of investment of USD 34.5 billion cannot be funded by the  
Government alone or generated through taxation.  The 1994 Telecom Policy  
of the Government recognized that public resources were inadequate to  
fund the scale of new investment required.  The Prime Minister announced  
in May 1994 that foreign telecom firms would be invited to participate  
as minority partners in offering basic telecom service to Indians.  The  
private sector is to supplement the continuing operations of India's  
Department of Telecommunications (DoT), which supplies basic telephone  
services, long distance services, and international gateways (to the  
Videsh Sanchar Nigam Ltd.).  The Government has to liberalize or at  
least rationalize the investment climate to make investments attractive.   
The process of rationalization has started and will be an ongoing  
process.    
  
Among the infrastructure sectors in India, the telecom sector has  
received the maximum attention from foreign companies due to its  
position as a major provider of business opportunities.  So far leading  
U.S. telecom companies like AT&T, Bell Atlantic, Northern Telecom,  
Pacific Telesis, Motorola, Nynex, U S West, Hughes, Sprint, Qualcomm and  
others, in collaboration with their Indian partners, are fiercely  
competing to enter this market. Their presence in this market, along  
with other overseas competitors like Telstra (Australia), British  
Telecom, France Telecom, Siemens, Ericsson, Fujitsu, Bell Canada  
Enterprises, etc. will make the Indian telecom market one of the most  
competitive in the world.  
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or     
even a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private     
Investment Corporation (OPIC) programs, investment treaty organizations  
and business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:     ELECTRIC POWER GENERATION  
ITA Industry Code:  ELP  
  
  
PART II:   NARRATIVE:  
  
Investments of the order of  USD 30 billion are required over the next  
10 years in the power sector.  While the Government aims to add 30,000  
MW during 1992-97, industry sources estimate the capacity expansion  
closer to 20,000 MW.  Since resources with the state-owned public sector  
are limited, the only alternative left, to bridge the growing gap  
between demand and supply, is to encourage large investments by the  
private sector.    
  
At present, about 84 percent of India's estimated 579,000 villages are  
electrified, with agricultural and residential users billed at heavily  
subsidized rates.    
  
India's per capita consumption is roughly 270 kw hours each year.   
Demand for power has been rising at a compound rate of 9 percent per  
annum, about twice the rate of India's economic growth.  This rate of  
demand is projected to be maintained until the year 2000.  
  
However, the lack of access to financial markets for the power sector,  
arising from the poor finances of the state electricity boards (SEB's),  
their weak track-record of meeting payment obligations and the lack of  
credit rating for international financial markets, are creating  
obstacles for private investment in power generation.    
  
Cumulative commercial losses of the SEB's up to 1994 were Rs. 41.6  
billion (USD 1.3 billion at 31:1).  In this scenario, most investors  
have been asking the Government of India for a counter-guarantee for  
payment obligations of the SEB's.  The Government has approved the  
extension of counter guarantees for eight independent power projects,  
with a total generating capacity of 5,000 MW.  However, counter  
guarantees have been finalized for only two of the eight "fast-track"  
projects so far.  
  
The most promising area from the standpoint of American firms in the  
Indian market is supply of large gas turbine based combined cycle and  
cogeneration plants where domestic suppliers do not have manufacturing  
capabilities.  It is anticipated that around 3,000 MW of equipment would  
be required in the period 1995-1997 for these products.  The key to  
success in the electrical power systems business in India lies in  
entering into technical collaborations before the market is about to  
expand substantially or investment through a multinational subsidiary.   
Already General Electric has signed a technical collaboration with  
Triveni Engineering Works for manufacturing steam turbines in India.    
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of sector:     FINANCIAL SERVICES  
ITA industry code:  FNS  
  
  
Part II:  NARRATIVE:  
  
India has set a modest real GDP growth target of 5.8 percent to achieve  
an estimated investment of over USD 200 billion for basic infrastructure  
by the year 2000.  Even though India's foreign reserves as of March 1995  
exceeded USD 20 billion, it needs to mobilize capital and credit from  
abroad for developing its weak infrastructure.  At the same time it also  
requires skills, systems and expertise from abroad to efficiently handle  
and monitor the huge sums of finances.  In India's liberalized economy,  
the U.S. continues as the largest foreign direct investor in financial  
services and in industrial production sectors.  Impressed with the  
potential that India holds for financial services, both banking and non- 
banking American institutions have assigned their representatives to  
make an assessment of the ground realities in India to formulate their  
plans to enter India's financial services market.  
  
India's financial systems and practices have a strong British influence.   
American banks in India have, in a short period, carved a sizeable  
market share for themselves.  It is evident that their presence and the  
presence of American financial firms like J.P. Morgan, Morgan Stanley  
and others are greatly impacting the market.  These institutions are  
aggressively pushing India's Finance Ministry to allow them to float  
American Depository Receipts (ADR's) listed on stock exchanges in New  
York.  These moves are seen with great apprehension by the British banks  
due to their traditional stronghold in India and the advantage of Indian  
firms opting for Global Depository Receipts (GDR's), listed in London.   
As a counter move a delegation of London financiers led by the British  
Chancellor of the Exchequer, Kenneth Clarke, visited India on the heels  
of U.S. Treasury Secretary Robert Rubin's visit in April 1995.    
  
The Industrial Development Bank of India (IDBI) is negotiating with the  
Japanese Exim Bank for a USD 300 million loan at an interest rate of not  
more than 50 basis points over LIBOR (London interbank offering rate),  
making it one of the cheapest loans in recent history.  This may tempt  
other financial institutions like the Industrial Credit and Investment  
Corporation of India (ICICI) and the Finance Corporation of India (FCI)  
to look to the Japanese for raising finance for projects with long  
gestation periods like transportation infrastructure.    
  
The Indian Government's recent policy of allowing nine big Indian  
industrial houses to raise more than USD 1.6 billion from the  
International debt market as External Commercial Borrowing (ECB), is an  
indicator of the pressure on the tight domestic money market.  The RBI's  
policy on curbing credit to control inflation, the Security and Exchange  
Board of India's strictures on the primary market issues, the sluggish  
equity market, the break in flow of funds from Foreign Institutional  
Investors (FII's), the political uncertainty of the ruling Congress  
party and the likely announcement of the general elections due by May  
1996 are the other key issues impacting the market and leading to  
bearish sentiments among investors.  
  
The most promising subsectors are Venture Banking, Consumer Financing,  
Mutual Funds, and Infrastructure Financing.   
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:  BUILDING MATERIALS & CONSTRUCTION EQUPMNT. INDUSTRIES  
ITA Industry Code: BLD/CON  
  
  
PART II:  NARRATIVE:  
  
The Indian building industry is expected to grow rapidly in the next  
five years.  Increasing urbanization, high land costs and improving wage  
levels are all fueling the demand for housing in India.  Traditional  
construction techniques and materials are being revised to speed up the  
construction process and improve the quality of building materials.   
Similar needs exist in the construction equipment industries as India  
launches major projects to meet its infrastructure needs.  These  
industries offer excellent investment opportunities for U.S. companies.     
  
With the increased demand for housing, including public sector housing  
projects, multifamily housing developments, and industrial, commercial,  
and office buildings, the Indian building industry is attempting to  
reduce the construction costs as well as the construction time.  As a  
response, the demand for prefabricated building materials, such as  
doors, metal-frame windows, fiberglass doors, prefabricated concrete  
building blocks, just to mention four major ready-to-use building  
products, is growing.   
  
In addition, improved roofing, plumbing, electrical, security, and  
heating/cooling materials are sought.  U.S. firms are now entering into  
joint ventures for producing prefabricated items and building materials.    
  
The Indian building products industry sector is in an relatively  
undeveloped stage but is expected to be a high profile growth industry  
for the rest of this decade.  For 1994-95 the total market size for  
building products is estimated at  USD 125 million but should grow to   
USD 429 million by the year 2000, thus offering excellent investment  
opportunities for U.S. firms.   
  
The GOI is giving its highest priority to develop the infrastructure  
with private sector participation.  Projects at the national and state  
level, including the construction of roads, airports, seaports, power  
plants, and rapid transit systems are attracting foreign interest.   
Private developers will want to use machinery that reduces their project  
costs and construction time.  Items such as loaders, excavators, cranes,  
soil vibratory compactors, crushers, mobile cement processing plants,  
among others, will be required.  Indian industrial houses manufacture  
some of this equipment in technical collaboration and joint ventures  
with foreign firms.  New collaborations and ventures are sought.    
  
The estimated market size of all construction, earthmoving, and mining  
equipment was  USD 1,268 million for 1994-95.  About 50 percent (USD 634  
million) of this was for equipment used in the large construction  
projects and the balance for mining activities.  The demand for  
construction equipment is expected to record an average annual growth  
rate of 25 percent for the next three to five years to reach USD 1,934  
million by the year 2000.  
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:      AUTOMOTIVE COMPONENTS   
ITA Industry Code:   APS  
  
  
PART II:   NARRATIVE:  
  
India produces over 2 million vehicles every year consisting of heavy  
commercial vehicles (HCV's), scooters, motorcycles, cars, jeeps, light  
commercial vehicles (LCV's) and tractors.  The total market size of the  
vehicle industry is estimated at USD 4.5 billion and the auto component  
sector, estimated at USD 1.1 billion, accounts for nearly 25 percent of  
the total vehicles market.  
  
The present level of output of 200,000 passenger cars per annum is  
expected to rise to 800,000 cars by the year 2000.  Since the Indian  
automotive industry has been delicensed and import restrictions have  
been eased significantly, several global car majors are eager to enter  
the market.  Consequently, auto parts makers are forging alliances and  
upgrading quality standards.  These new entrants realize that to remain  
competitive they need to source components from India.      
  
Several car giants have already signed joint ventures to manufacture  
passenger cars in India.  The Indian auto components industry grew at  
more than 15 percent in 1993 largely because of its success on the  
export front which was USD 275 million.  This growth is likely to  
accelerate to 25 percent per annum.  To meet international standards,  
Indian companies have to upgrade and improve the quality of their  
components.   
  
The  Automotive Components Manufacturers Association (ACMA) is  
supporting the expansion and modernization plans of the top 50 Indian  
auto parts makers.  With economic liberalization, these firms have  
obtained the foreign technology and machinery needed to upgrade  
manufacturing processes.  Over 40 Indian component manufacturers have  
received ISO 9000 certification.    
  
The next three years should see the industry making twice the  
investments it made so far.  In the next five years USD 2 billion is  
likely to be invested in the Indian auto components sector.  1995 alone  
will see USD 400 million invested.    
  
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of sector:        HOTEL & MOTEL INDUSTRY  
ITA industry code:     HLT/TRA  
  
  
PART II:   NARRATIVE:  
  
The Indian hospitality industry is growing at a rate of 15 percent  
annually. The current gap between supply (59,930 rooms) and demand  
(90,000 rooms) is expected to widen further as the economy opens and  
grows.  
The hotels in India have witnessed a spurt in business travellers, who  
account for an occupancy of four days in a week (about 60 per cent).   
Business traffic has thus increased the demand for rooms, reliable  
telecommunication systems and world class business facilitation/travel  
services, giving a new dimension to the Indian hospitality industry.   
There is an excellent investment potential in this sector. Many U.S.  
companies have already tied up with prominent Indian companies for  
setting up new hotels, motels and holiday resorts. The entry of  
McDonald's, Pepsico's Kentucky Fried Chicken, and Pizza Hut, will  
further boost market potential for U.S. hospitality products/services.  
  
U.S. companies will face competition from major Indian and foreign  
hoteliers for a larger market share. Several international chains:  
Sheraton, Holiday Inn, Intercontinental, Hyatt, Radisson, Best Western,  
Days Inn, Quality Inn, Ramada Inn, Meridien, Kempenski, Four Seasons  
Regent, Accor, and Marriott International are entering or expanding  
their hotel network in India. Indian companies have investment plans of  
more than USD 500 million for the expansion/modernization of their hotel  
chains.  
  
The average cost of putting up a five star hotel of 300 rooms in any of  
the major metros is between USD 50-70 million and the gestation period  
for this is between 3-4 years. The Government forecasts an additional  
requirement of 55,000 rooms in all categories by 1997 and 200,000 rooms  
by the turn of the century.  Increasing real estate prices will have a  
significant impact on investments. The reduced tariffs (now down to 35  
per cent) on project imports will facilitate investments in this sector.  
  
The most promising sub-sectors are: Budget hotels, Country/Holiday  
resorts, Time-Sharing Franchising/Chains.  
  
  
PART III:  DATA TABLE:  
  
                                  1994      1995       1996  
                                       (U.S. $ Million)  
  
A. Total Sales                     1,705     2,083      2,310  
B. Sales by local firms              684       893      1,010  
C. Sales by foreign firms          1,021     1,190      1,300  
D. Sales by U.S. firms               103       119        129  
  
Exchange rate:1 USD equals:         31.00     31.20     33.00  
  
Note:   The above statistics are unofficial estimates.  
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:      COLD STORAGE CHAINS  
ITA Industry Code:   ACR  
  
PART II:  NARRATIVE:  
  
Top priority is being accorded to the food processing industry sector  
because the Government's thrust is on enhancing value added food exports  
from India.  As a result, the setting up of value-added food processing  
projects and extensive cold storage chains will further boost exports.  
  
India occupies the second position in the world in the annual production  
of fruits (27.83 million metric tons (MT) and vegetables (51 million MT)  
but the country has established less than 5.0 million MT of processing  
capacity to date.  More than 40 percent of the food items are wasted due  
to outmoded transportation, storage, and processing infrastructure.   
Realizing the potential, both Indian and foreign firms have identified  
new food processing and preservation projects.  Kellogg's, McCormick,  
and Pepsi Foods are some of the U.S. firms participating in the  
modernization of the Indian food processing industry.  
  
Existing and proposed ventures require an extensive and a reliable cold  
storage chain for preserving food products during processing,  
distribution, storage and at the point of sale.  Refrigerated  
warehouses, freezing equipment including freeze-drying machinery,  
refrigerated trucks, industrial freezers and chillers, refrigerated  
display cases and centralized air conditioning systems are products  
offering opportunities to the U.S. industry.    
  
Recent published reports estimate that the total market size for  
refrigeration equipment of all types is USD 450 million.  Of this, 40  
percent by value, represents the industrial refrigeration market; the  
balance is the market for domestic airconditioners and refrigerators.   
The industrial refrigeration sector is expected to reach USD 650 million  
by the year 2000, reflecting an average annual growth rate of 52  
percent.     
  
A chronic shortage of electrical power generating capacity has limited  
the expansion of the cold storage chain in India's major cities.  When  
an additional 12-20,000 MW of power is added by private sector projects  
during the next five years, rural areas will have the necessary power  
capacity to store refrigerated and frozen food products.  Exports of  
seafood and cut flowers, both strong prospects, will be enhanced by  
improvements in cold storage capability at airports and ports.  
  
Domestic manufacturing of industrial-type refrigeration equipment is  
expected to increase in the next three to five years.  Indian firms seek  
joint ventures with foreign partners for manufacturing modern  
refrigeration equipment, especially those using ozone friendly  
refrigerants.  Indian firms also manufacture trucks using imported  
refrigeration equipment but new projects will be established to meet the  
expected domestic demand.   
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:     COAL WASHERIES AND COAL BED METHANE PROJECTS  
ITA Industry Code:  COL  
  
  
PART II:  NARRATIVE:  
  
New Coal Washery Projects:  
  
The total coal reserves in India are estimated at about 196 billion  
metric tons, of which 70 percent are located in the eastern region. The  
annual production of coal in India is around 230 million metric tons.   
90 percent of this is contributed by the seven mining divisions of Coal  
India Limited (CIL), which is wholly owned by the Government of India.   
As most of the non-coking coal, produced in the country, has high ash   
content (40-45 percent, on average), CIL proposes to set up coal  
washeries near the mine pit-heads for beneficiation of the coal before  
it reaches the users, like the thermal power plants all over India. In  
order to privatize non-coking coal washeries, CIL has invited Indian and  
foreign companies to bid for 14 new washeries to be set up on a "Build,  
Own and Operate" (BOO) basis. CIL will provide land for the washeries  
near the pit-heads on a long lease, but washed coal and washery rejects  
will remain its property.  However, the private investors would be  
allowed to charge a coal beneficiation price.  
  
So far global tenders for only 7 of the proposed new washeries were  
invited  and out of the offers received, 5 firms (including an American  
company) were short-listed. CIL will award contracts after due  
negotiations with these firms. In the second phase,  global tenders for  
the remaining 7 locations will be called. This will present U.S.  
companies with significant new opportunities for investment in non- 
coking coal washeries in India's growing market.  
  
Coal Bed Methane (exploration and recovery):  
  
India has vast reserves of bituminous coal of Paleozoic/Gondwana and  
Tertiary ages within the coal bed methane (CBM) window of nearly 250- 
1200 meters depth. Preliminary estimates indicate that the CBM resource  
is immense. However, lack of data on producible reserves, gas content,  
reservoir saturation and permeability have hindered exploitation of the  
resource. The Government of India is interested in inviting foreign and  
Indian private companies to offer proposals for exploration and  
commercial exploitation of CBM resources at some of the underground coal  
mines in Bihar, West Bengal and Madhya Pradesh. Apart from its value as  
a clean burning fuel for both domestic and industrial use, CBM  
extraction decreases explosion hazards in the underground coal mines.   
  
At least three U.S. companies have already expressed interest in leasing  
of coal-bearing areas for coring and test drilling to  explore CBM  
resources. The government is allowing exploratory drilling in a 225  
square kilometer area in a CIL-owned mine at Ranigunj in West Bengal.  
Other areas in southern Bihar and also in Orissa are under active  
consideration. If ultimate recovery and commercial exploitation of the  
CBM gas in these areas prove commercially and environmentally viable,  
the exploring firms will be free to construct pipelines and sell the gas  
to consumers or set up gas-based power plants.  
  
As the U.S. has leading edge technology for the exploration and recovery  
of coal bed methane gas, the development of the CBM industry in India  
would rely heavily on the provisions of U.S. equipment and services.  
Therefore, the CBM industry in India may be a new and significant  
investment opportunity for more U.S. companies.  
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
  
              CHAPTER V:  BEST PROSPECTS FOR AGRICULTURAL  
                        GOODS AND SERVICES  
  
PART I:  BEST PROSPECTS  
  
Rank of Sector:      N/A  
Name of Sector:      Pulses  
PS+D Commodity Code: 0542100, 0542200, 0542300, 0542400  
  
  
PART II:   NARRATIVE:  
  
Domestic pulse production has not kept pace with demand. Imports are  
expected to be near record levels again in 1995/96.  India is primarily  
a price (rather than a quality) market.  In addition to the U.S.,  
imports are sourced from Myanmar, Turkey, Canada, Hungary and Australia.   
Firm U.S. prices hindered exports during CY 1994 and much of 1995.   
Nevertheless, exporters with competitively-priced supplies, particularly  
green peas, lentils and some dry beans, should find a home for their  
products in India's growing pulses market during 1995/96.   Pulses enjoy  
a 10 percent duty and are on Open General License.  
  
  
PART III:   DATA TABLE:  
  
                                 1993/94   1994/95   1995/96  
                                      (U.S. $ MILLION)  
  
A.  Total Market Size             13.40     13.80     14.30  
B.  Total Local Production        12.80     13.10     13.70  
C.  Total Exports                  0.00      0.00      0.00  
D.  Total Imports                  0.60      0.65      0.60  
E.  Imports From the U.S.          0.02      0.02      0.02  
  
1993/94 Trade figures are based on Indian Fiscal Year (Apr/Mar) official  
estimates, all other statistics are unofficial estimates and are based  
on the local marketing year.    
  
  
PART I:  BEST PROSPECTS  
  
Rank of Sector:      na  
Name of Sector:      Corn  
PS+D Commodity Code: 0440000  
  
  
PART II:   NARRATIVE:  
  
India's domestic poultry industry is growing at an estimated annual rate  
of 15 percent. As the fast food and food processing industries grow and  
infrastructure improves, demand for poultry products (per capita  
consumption currently is 0.6 kg per year) is expected to rise.  Corn is  
a major input to poultry feed production and domestic production has  
stagnated in recent years.    
  
While corn imports have been rare in the past (import duty is 0),  
India's poultry industry is expected to become a regular corn importer  
in the coming years, particularly during the summer months before  
harvest.  While corn imports are no longer "canalized" (restricted)  
through state enterprise (parastatal) importers, India's trade policy  
states that imported corn must be fit only for feed use.  The government  
is aware that this restriction is inconsistent with international  
trading norms.  Officials have indicated they are seeking a solution  
that would allow corn imports for the poultry industry, while satisfying  
government concerns that corn is not be used for human consumption.  
  
Small quantities of imports are expected during 1995/96.  Future trade  
volumes could be significant.  
  
  
PART III: DATA TABLE:  
  
                                 1993/94        1994/95       1995/96  
                                            (U.S. $ MILLION)  
  
A.  Total Market Size               9.5           10.50        10.05  
B.  Total Local Production          9.5           10.00        10.00  
C.  Total Exports                   0.0            0.00         0.00  
D.  Total Imports                   0.0            0.05         0.05  
E.  Imports From the U.S.           0.0            0.05         0.05  
  
1993/94 Trade figures are based on Indian Fiscal Year (Apr/Mar) official  
estimates, all other statistics are unofficial estimates and are based  
on the local marketing year.   
  
  
PART I:   TITLE:   BEST PROSPECTS  
  
Rank of Sector:      na  
Name of Sector:      Vegetable Oil  
PS+D Commodity Code: 4240000  
  
  
PART II:   NARRATIVE:  
  
India recently liberalized vegetable oil imports.  Most major oils are  
now on Open General License and may be imported by the private sector at  
a 30 percent duty.  Two of India's state enterprise (parastatal) trading  
organizations may import at a 20 percent duty.  Despite record oilseed  
production, rising domestic demand is expected to push imports well  
above recent levels.   
  
While, palmolein is most commonly imported, small quantities of soybean,  
sunflower, and cottonseed oil have been imported recently.  So long as  
U.S. supplies are competitively priced, India represents an excellent  
market opportunity for U.S. vegetable oils.     
  
  
PART III: DATA TABLE:  
  
                                   1993/94   1994/95   1995/96  
                                        (MILLION METRIC TONS)  
  
A.  Total Market Size                5.70      6.05      6.30  
B.  Total Local Production           5.40      5.60      5.70  
C.  Total Exports                    0.00      0.00      0.00  
D.  Total Imports                    0.30      0.45      0.60  
E.  Imports From the U.S.            0.04      0.02      0.07  
  
1993/94 Trade figures are based on Indian Fiscal Year (Apr/Mar) official  
estimates, all other statistics are unofficial estimates and are based  
on the local marketing year.  
  
  
PART I:  BEST PROSPECTS  
  
Rank of Sector:      na  
Name of Sector:      Cotton  
PS+D Commodity Code: 2631000  
  
  
PART II:  NARRATIVE:  
  
India placed cotton on Open General License during 1994 at a zero duty.   
In response to tight post-harvest supplies, Indian millers purchased  
between 200 and 250,000 bales of U.S. cotton during early 1995.  With a  
growing domestic textile industry, emphasis on textile exports, and no  
appreciable increase in production in recent years, India is expected to  
be a regular importer of quality long staple cottons and an occasional  
importer of medium staple cottons.  Assuming competitive pricing, the  
U.S. is in a good position to supply a significant portion of India's  
future cotton imports.  
  
  
PART III:  DATA TABLE:  
  
                                     1993/94   1994/95   1995/96  
                                      (MILLION METRIC TONS)  
  
A.  Total Market Size                 2.09      2.27      2.16  
B.  Total Local Production            2.10      2.20      2.28  
C.  Total Exports                     0.07      0.05      0.14  
D.  Total Imports                     0.06      0.12      0.02  
E.  Imports From the U.S. 1/          0.045 2/        
  
All figures are local marketing year, except imports from U.S. which are  
calendar year.  
  
1/ 703 metric tons  
2/ 2,000 metric tons  
  
  
PART I:  BEST PROSPECTS  
  
Rank of Sector:      na  
Name of Sector:      Tree Nuts and Dry Fruit (excluding cashews)  
PS+D Commodity Code: 0802110000, 080212, 0802320000, 0802502100  
  
  
PART II:  NARRATIVE:  
  
Imports of dry fruit are exempt from the ban on consumer product  
imports.  U.S. almond exports climbed to a record  USD 24 million in  
1994.  The U.S. is the dominant supplier of in-shell almonds to India  
with approximately 90 percent of the market.  In addition, exports of  
almonds and pistachios in consumer packs are taking place.  Other dry  
fruits with market potential include prunes and raisins.  However, high  
import duties continue to hinder trade.  Almonds are subject to a duty  
of Rs. 44 and Rs. 80 per kg for in- shell and shelled respectively.   
Almonds, pistachios and prunes shipped in consumer packaging are subject  
to a duty of 50 percent.  Raisins are subject to a duty of 135 percent.  
  
  
PART III: DATA TABLE:  
  
                                    1993/94   1994/95   1995/96  
                                        (MILLION METRIC TONS)  
  
A.  Total Market Size                 na         na        na  
B.  Total Local Production 1/        0.037      0.042   0.044  
C.  Total Exports                    0.014      0.015   0.016  
D.  Total Imports                    0.021      0.022   0.023  
E.  Imports From the U.S.            0.011      0.011   0.012  
  
1993/94 Trade figures are based on Indian Fiscal Year (Apr/Mar) official  
estimates, all other statistics are unofficial estimates.  U.S. trade  
figures are on a calendar year.  
  
1/ Walnuts, Almonds and Raisins  
  
  
PART I:   TITLE:   BEST PROSPECTS  
  
Rank of Sector:      na  
Name of Sector:      Wood Products  
PS+D Commodity Code: 4401  
  
  
PART II:   NARRATIVE:  
  
India liberalized imports of wood products in 1995.  Previously, imports  
were only against advanced licenses or special import licenses.  Small  
quantities of U.S. logs and other inputs were imported for re-export of  
finished wood products.  Now a range of wood products may be imported  
for use in the domestic market, although import duties for most products  
are 50 percent (logs are 15 percent) and some products are subject to a  
countervailing duty (equivalent to the excise tax on domestic products).    
  
India's domestic supplies of wood are very limited.  While imports in  
the past have been almost exclusively for re-exports of finished wood  
products, the recent decision to allow imports signals a realization on  
the government's part that imports should be allowed to augment domestic  
supplies.  While current duty levels may limit imports in the short  
term, if tariffs continue to fall, wood imports are likely to become  
increasingly feasible in the future.   
  
  
PART III: DATA TABLE:  
  
                                    1993/94   1994/95   1995/96  
                                             (U.S $ MILLION)  
  
A.  Total Market Size                  na         na         na  
B.  Total Local Production             na         na         na  
C.  Total Exports                     50.0       53.0      58.0  
D.  Total Imports                    144.0      149.0     157.0  
E.  Imports From the U.S.              0.5        1.0       2.0  
  
1993/94 Trade figures are based on Indian Fiscal Year (Apr/Mar) official  
estimates, all other statistics are unofficial estimates.  U.S. trade  
figures are on a calendar year.  
  
  
PART I:  BEST PROSPECTS  
  
Rank of Sector:      na  
Name of Sector:      Intermediate Food Products  
PS+D Commodity Code: na   
  
  
PART II: NARRATIVE:  
  
As India's food processing industry becomes more sophisticated, demand  
for quality intermediate food products and ingredients is expected to  
grow.  Many of India's major food processing companies have expressed  
interest in importing intermediate food products such as cheese powders,  
flavorings, mixes, and concentrates.    
  
One problem in this area is that customs officials are often unfamiliar  
with these products.  Clearing customs can be difficult and many of  
these products may be classified as consumer products.  Importers should  
contact customs officials for a pre-shipment ruling on their product  
which will determine the applicable duty and whether the product is  
considered a consumer product.   
  
  
PART III: DATA TABLE:  
  
                               1993/94   1994/95   1995/96  
                                      (U.S $ MILLION)  
  
A.  Total Market Size             na       na          na  
B.  Total Local Production        na       na          na  
C.  Total Exports                 na       na          na  
D.  Total Imports                 3.0      5.0        7.0  
E.  Imports From the U.S.         1.0      1.5        3.0  
  
All figures are estimates, U.S. trade figures are on a calendar year and  
are based on U.S. Bureau of the Census figures.  
  
  
PART I:  INVESTMENT OPPORTUNITIES  
  
Name of Sector:      FOOD PROCESSING INDUSTRY   
ITA Industry Code:   FPP  
  
  
PART II: Narrative:   
  
The approved foreign investment in India's food processing industry was   
USD 708 million from 1991-1994.  Many Indian firms are eagerly seeking  
joint venture partners in this area and also technology and equipment  
associated with the manufacture, marketing, handling and packaging of  
food products.  In the past few years there have been a number of  
American companies that have established food processing companies in  
India in production areas such as tomato paste, ready-to-eat breakfast  
cereals, ice cream, soft drinks, snack foods, chewing gum, spices, and  
other products.  Some of these are wholly owned, but approval is easier  
for joint ventures, with at least minority shares by local partners.   
Some major American fast food companies are entering India because the  
domestic market for fast food is expanding rapidly and is likely to  
continue expanding as India's economy grows more than twice as fast as  
its population.  Most of the foreign companies are relying on local  
sources of supply for bulk of their raw materials, but India's trade  
policy permits the possibility of importing products for value-added  
processing.  A number of companies are importing some food production  
inputs for this purpose.       
  
*   The Government of the United States acknowledges the contribution  
that outward Foreign Direct Investment makes to the U.S. economy.  U.S.  
Foreign Direct Investment is increasingly viewed as a complement or even  
a necessary component of trade.  Recognizing the benefits that U.S.  
outward investment brings to the U.S. economy, the Government of the  
United States undertakes initiatives such as Overseas Private Investment  
Corporation (OPIC) programs, investment treaty organizations and  
business facilitation programs, that support U.S. investors.  
  
  
  
               Chapter VI.  Trade Regulations and Standards  
  
In 1994, the United States trade deficit with India was USD 3 billion,  
or USD 1.2 billion greater than that in 1993.  U.S. merchandise exports  
to India were USD 2.3 billion, down  USD 465 million or 17 percent from  
1993.  India was the United States' thirty-fifth largest export market  
in 1994.  U.S. imports from India totaled USD 5.3 billion in 1993, or  
16.5 per cent higher then in 1993.  
  
The stock of U.S. foreign direct investment was USD 759 million in 1993,  
56.5 per cent higher than in 1991, United States direct investment in  
India is largely concentrated in manufacturing and banking.  
  
IMPORT POLICIES  
  
In June 1991, the then newly-elected government of Prime Minister P.V.  
Narasimha Rao recognized that India's budget deficit, balance of payment  
problems and structural imbalance would require re-evaluation of past  
economic policies and structural adjustment assistance from  
international financial institutions.  As part of this economic reform,  
the Indian government has taken consistent steps towards a more open and  
transparent trade regime, leading to a significant increase in Indo-U.S.  
trade and investment.  With substantial additional liberalization, U.S.- 
India trade could become quite significant.  
  
Despite recent tariff reductions and liberalization of quantitative  
restrictions, India's almost total ban on consumer goods imports,  
quantitative restrictions under its negative import list, and high  
tariffs remain a serious impediment to U.S. trade, especially in  
agricultural and consumer items.  The United States continues to raise  
and to discuss India's restrictive trade practices in all trade-related  
meetings with Indian officials, in the World Trade Organization (WTO),  
and in regular bilateral consultations through the U.S.-India Economic  
Subcommission and other meetings.  
  
TARIFFS  
  
The Indian government continues to reduce tariff rates.  In 1991, some  
were as high as 300 percent.   A ceiling rate of 65 percent was set in  
the 1994/95 budget, and this was reduced to 50 percent in India's  
1995/96 budget.  India has selectively lowered tariffs on some capital  
goods and semi-manufactured inputs to help Indian manufacturers.  The  
Government has steadily reduced the import-weighted tariff from 87  
percent to 33 percent at present.  In fact the Government of India has  
reduced the maximum and imported weighted average tariffs in each of the  
last four budgets.  India now appears likely to achieve its goal of a 25  
percent import weighted average by IFY 96-97.  
  
Despite reforms, Indian tariffs are still some of the highest in the  
world, especially for goods that can be produced domestically.  Most  
agricultural products face trade barriers which severely restrict or, in  
the case of processed foods, prohibit their import.  Consumer goods are  
similarly restricted.  
  
India maintains a variety of additional duties or countervailing duties,  
raising effective tariff rates well above the tariff ceiling for some  
products.  For example, soda ash is estimated at 112.75 per cent import  
charge with all duties combined, while the basic tariff rate is 65  
percent.  Some telecommunications projects have been granted a special  
status which allows imports of infrastructure to be imported at a 35  
percent duty rate.  Other telecommunications infrastructure equipment is  
assessed at an effective duty rate of 100 per cent.  Higher effective  
rates also affect chocolate and confectionery products (81.5-106.25  
percent); appliances (65-98 percent); and toys and sporting goods (65- 
89.75 percent).  
  
Progress made thus far in tariff reduction has helped U.S. producers,  
but further reductions of basic tariff rates and elimination of  
additional duties would benefit a wide range of U.S exports.  For  
example, the tariff on almonds is calculated at 80 rupees per kilogram  
for shelled almonds.  The market potential, were the tariff removed, is  
estimated between USD 100-500 million.  
  
Other industries that might benefit from reduced tariff rates include  
(actual basic tariff rate in parenthesis) fertilizers (0-65 percent);  
wood products (0-65 percent); ferrous waste and scrap (10-65 percent);  
computers, office machinery and spares (5-65 percent); heavy equipment  
spares (60-80 percent); medical equipment components (40 percent);  
copper waste and scrap (40-50 percent); instant print film (50 percent);  
hand tools (60 percent); soft drinks (50 percent); cling peaches (65  
percent); vegetable juice (65 percent); and canned soup (65 percent).  
  
In the Uruguay Round, India undertook a two-tiered offer on industrial  
products, binding tariffs on items in excess of 40 per cent and binding  
items with tariffs below 40 per cent at 25 per cent.  Some additional  
goods (e.g. automobiles) and all consumer products were excluded from  
India's offer.  As a consequence, India's scope of binding on industrial  
goods increased substantially from 12 per cent of imports to 68 per cent  
once all reductions are staged in.  The overwhelming majority of these  
bindings exceed current Indian applied rates of duty.  
  
In agriculture, Uruguay Round tariff bindings are higher then actual  
rates in important sectors, ranging from 100 to 200 percent.  
  
As a result of Uruguay Round commitments under the Multifiber Agreement,  
India and the United States concluded successful bilateral textile  
negotiations giving the United States rapid and significant reductions  
on the entire range of textile products.  The agreement is pivotal  
because it calls for India to lower its tariffs largely over a 5 year  
period with some of these reductions being reached within 4 years.   
Indian tariffs will be reduced to levels no higher then 20 percent for  
yarns and fibers; 25 percent for industrial fabrics; 30 percent or most  
apparel fabrics; 35 percent for most home furnishings and apparel items.  
  
IMPORT LICENSING  
  
In addition to high tariff rates, U.S. industries must deal with India's  
import licensing regime.  The regime has been liberalized but still  
limits U.S. goods which would be competitive in a more open trading  
environment.  Importation of "consumer goods" is virtually banned except  
for some imports under the special import license (SIL) arrangement.   
Consumer goods are defined as goods which can directly satisfy human  
needs without further processing.  As a result, products of agricultural  
or animal origin must be licensed and are therefore, with few  
exceptions, effectively banned.  Some commodity imports must be  
channeled ("canalized") through public enterprises, although many  
"canalized" items have been decontrolled recently.     
  
Currently, the main canalized items are petroleum products, bulk  
agricultural products such as grains and vegetable oils, and some  
pharmaceutical products.  
  
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 for foreign  
investors, both portfolio and direct, are fully convertible.  However,  
Indian firms and individuals remain subject to capital account  
restrictions.  
  
QUANTITATIVE RESTRICTIONS  
  
India's import policy is administered via a negative list.  The negative  
list is divided into three categories (1) banned or prohibited items  
(tallow, fat & oils of animal origin); (2) restricted items, requiring  
an import license, including all consumer goods (as defined in the  
import licensing section above), such as instant print film, distilled  
spirits, canned soup, vegetable juice, seeds, plants, animals,  
insecticides, pesticides, electronics items and components, chemicals  
and pharmaceuticals, and a wide variety of other items; and (3)  
"canalized" items importable only by government trading monopolies (bulk  
agricultural commodities) and subject to Cabinet approval regarding  
timing and quantity.   
  
India has liberalized many restrictions on the importation of capital  
goods.  The importation of all second-hand capital goods by actual users  
is permitted, without license, provided the goods have a residual life  
of five years.  
  
Nearly all apparel, fabrics, and many types of yarn imports into India  
were banned until 1995.  Under the United States-India Textile Agreement   
effective January 1, 1995, all exports of U.S. textile and apparel  
products will be "eligible" for entry into India.  Immediate  
"unrestricted" access will be provided to several key U.S. products --  
including fibers, yarns and industrial fabrics.  Similarly  
"unrestricted" access for apparel fabrics, home furnishings and clothing  
will be provided as soon as India lifts its Balance of Payments  
exemption or in no more than three years for home furnishings and  
apparel fabrics, five years for most apparel and seven years for other  
items, whichever is sooner.  All products covered by the United States- 
India Textile Agreement are also eligible for importation as of February  
15, 1995, under India's Special Import License (SIL) Program.  
  
BALANCE OF PAYMENTS  
  
India has claimed that virtually all its quantitative restrictions are  
justified on balance of payment grounds under the General Agreement on  
Tariffs and Trade (GATT) 1994, Article XVIII:B.  Reservations taken  
under the GATT 1994 agreement and the resulting restrictions imposed on  
industries doing business in India represent significant barriers to  
doing business in India.  Removal of balance of payment restrictions  
will represent liberalization of the Indian economy, affecting a wide  
range of U.S. industries.  India will undergo a WTO balance of payments  
review in the latter half of 1995.  
  
GOVERNMENT PROCUREMENT  
  
Indian government procurement practices are not transparent and  
discriminate against foreign suppliers.  Procedures are not  
standardized.  Local suppliers are favored in most contracts where their  
prices and quality are acceptable, even if not economical.  Government- 
owned companies have been known to cash performance bonds of foreign  
companies even when there has been no dispute over performance.  
  
A second area of discrimination affecting U.S. suppliers is the  
prohibition of defense procurement through agents.  Most U.S. firms do  
not have enough business in India to justify the high cost of resident  
representation.  
  
Some major government entities routinely use foreign bids to pressure  
domestic producers to lower their prices, permitting the local bidder to  
resubmit tenders when a foreign contractor has underbid them.  The cost  
of this barrier is estimated between USD 100 to 500 million.  
  
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  
policies require discrimination against foreign suppliers when goods or  
services of comparable quality and prices are available locally.  
  
EXPORT SUBSIDIES  
  
Export promotion measures include exemptions or concessional tariffs on  
raw materials and capital inputs, and access to special import licenses  
(SIL) for restricted inputs.  Concessional income tax provisions apply  
to exports (export earnings are tax exempt).  Commercial banks also  
provide export financing on concessional terms.  
  
LACK OF INTELLECTUAL PROPERTY PROTECTION  
  
Based on past practices, India was identified in April 1991 as a  
"priority foreign country" under the "Special 301" provision of the 1988  
Trade Act, and a Section 301 investigation was initiated on May 26,  
1991.  In February 1992, following a nine-month investigation under  
"Special 301" the USTR determined that India's denial of adequate and  
effective intellectual property protection was unreasonable and burdens  
or restricts U.S. commerce, especially in the area of patent protection.   
India is not a member of the Paris Convention, nor does it have a  
bilateral patent agreement with the United States.  
  
In April 1992, the President suspended duty-free privileges under the  
Generalized System of Preference (GSP) for USD 60 million in trade from  
India.  This suspension applied principally to pharmaceuticals,  
chemicals, and related products.  Benefits on certain chemicals added to  
GSP in June 1992 were withheld from India, increasing the trade for  
which GSP is suspended to approximately USD 80 million.  Significant  
revisions to India's copyright law in May 1994 led to the downgrading of  
India from a "priority foreign country" to the "priority watch list".  
  
PATENTS  
  
India's patent protection is weak and has especially adverse effects on  
U.S pharmaceutical and chemical firms.  Estimated annual losses to the  
pharmaceutical industry due to piracy are USD 450 million.  India's  
Patent Act prohibits patents for any invention intended for use or  
capable of being used as a food, medicine, or drug or relating to  
substances prepared or produced by chemical processes.  Many U.S.- 
invented drugs are widely reproduced since product patent protection is  
not available.  
  
Under existing law, processes for making such substances are patentable,  
but the patent terms for these processes is limited to the shorter of  
five years from patent grant or seven years from patent application  
filing.  This is usually less then the time needed to obtain regulatory  
approval to market the product.  
  
Where available, product patents expire 14 years from the date of patent  
filing.  Stringent compulsory licensing provisions have the potential to  
render patent protection virtually meaningless.  There are broad  
"licenses of right" that automatically apply to patents for foods and  
drugs.  
  
India also fails to protect biotechnological inventions, methods of  
agriculture and horticulture, and processes for treatment of humans,  
animals or plants.  
  
Indian policy guidelines normally limit recurring royalty payments,  
including patent licensing payments, to 8 percent of the selling price  
(net of certain taxes and purchases).  Royalties and lump sum payments  
are taxed at a 30 percent rate.  
  
Many of these barriers must be removed as India fulfills its commitments  
under the Uruguay Round Agreement on Trade Related Aspects of  
Intellectual Property Rights (TRIPS).  The Indian Government has  
announced its intention to conform fully to the IPR-related requirements  
of the Uruguay Round.  The Government is already in the process of  
implementing the so-called TRIPS "mailbox" requirements for patents.   
The United States continues to urge more accelerated implementation of  
the TRIPS patent provisions.  
  
COPYRIGHT  
  
Under the pressure of its own domestic industry, India strengthened its  
copyright law in May 1994, placing it on par with international  
practice.  Piracy of copyrighted materials (particularly popular fiction  
works and certain textbooks) remain a problem for U.S. and Indian  
producers.  Video, record, tape, and software piracy are also  
widespread, but improvements have been made.  Indian copyright law has  
undergone a series of changes over the last ten years to provide  
stronger remedies against piracy and to protect compute software.  In  
1994, Parliament passed a comprehensive amendment to the 1957 Copyright  
Act.  India's law now provides: rental rights for video cassettes;  
protection for works transmitted by satellite, cable or other means of  
simultaneous communications; exemption from public performance for sound  
recording; collective administration of rights; and limiting judicial  
discretion with respect to the level of penalties imposed on copyright  
pirates.  However, as of June 1995, implementation regulations for the  
Copyright Amendments had not been put into place.  Thus, the legal  
status of the amendments is unclear.  
  
Indian copyright law offers protection, but the Indian Constitution  
gives enforcement responsibility to the state governments.   
Classification of copyright and trademark infringements as "cognizable  
offenses" has expanded police search and seizure authority, while the  
formation of appellate boards has speeded prosecution.  Other steps to  
improve copyright enforcement, include: the establishment of a Copyright  
Enforcement Advisory Council with responsibility for policy development  
and coordination; the initiation of a program for training police  
officers and prosecutors concerned with enforcement of copyright laws;  
and the compilation of data on copyright offenses on a nationwide basis  
to assist in enforcement and application of penalties.  However, because  
of problems with the court system, few if any cases have been prosecuted  
recently.  
  
Cable piracy continues to be a significant problem, with an estimated  
20,000 illegal systems in operation in India at this time.  A cable bill  
to regulate the industry was submitted to Parliament in 1993, but has  
been sent back to the Ministry of Information and Broadcasting for  
revision.  
  
TRADEMARKS  
  
In February 1992, the Government of India announced that it would accord  
national treatment for the use of trademarks owned by foreign  
proprietors.  The Indian government also stated that it would introduce  
legislation in Parliament to provide statutory protection of service  
marks and to clarify the conditions under which the cancellation of a  
mark due to non-use is justified.  However, as of January 1995, this  
legislation has not as yet been introduced in Parliament.  
  
Use of foreign marks in India is still difficult, although enforcement  
is improving.  Guidelines for foreign joint ventures  have prohibited  
the use of "foreign" trademarks on goods produced for the domestic  
market (although several well-known U.S. firms were authorized in  
October 1991 to use their own brand names).  The required registration  
of a trademark license has routinely been refused on such grounds as  
"not in the public interest," "will not promote domestic industry," or  
for "balance of payments" reasons.  The Foreign Exchange Regulation Act  
(FERA) restricts the use of trademarks by foreign firms unless they  
invest in India or supply technology.  
  
In an infringement suit, trademark owners must prove that they have used  
their mark to avoid a counter claim for registration cancellation due to  
non-use.  Such proof can be difficult given India's policy of  
discouraging foreign trademark use due to a supposed Indian consumer  
prejudice in favor of foreign goods.  
  
No protection is available for service marks.  Trademarks for several  
single ingredient drugs cannot be registered.  There have been several  
cases where unauthorized Indian firms have used U.S. trade marks for  
marketing Indian goods.  However, the Indian courts have recently upheld  
trademark owner rights in infringement cases.  
  
SERVICE BARRIERS  
  
The Indian Government runs many major service industries either  
partially or entirely.  However, both foreign and domestic private firms  
play a large role in advertising, accounting, car rental and a wide  
range of consulting services.  There is growing awareness of India's  
potential as a major service exporter and increasing demand for a more  
open service market.  
  
INSURANCE  
  
All insurance companies are government-owned except for a number of  
private sector firms which provide re-insurance brokerage services.   
Foreign insurance companies have no direct access to the domestic  
insurance market except for surplus lines, some reinsurance, and some  
marine cargo insurance.  A government appointed committee (Malhotra  
Committee) recommended that the insurance sector be opened up to private  
sector competition, both domestic and foreign.  
  
Following investigations initiated in 1989 under the "Super 301"  
provision of the 1988 Trade Act, the USTR determined in June 1990 that  
India's insurance practices are unreasonable and burden or restrict U.S.  
commerce, but that retaliation was inappropriate at that time given an  
ongoing negotiation on services and investment in the Uruguay Round.   
The investigation was terminated with the June 14 announcement.  India  
has offered in the Uruguay Round services negotiations to bind the  
limited range of insurance lines currently open to foreign  
participation.  Negotiations continue under the auspices of the Uruguay  
Round continuing financial services negotiations.  
  
BANKING  
  
Most Indian banks are government-owned.  However, five new private  
sector banks have been approved.  Other government-owned banks are  
expected to follow suit once legislation is enacted.  The Reserve Bank  
of India (RBI) issued guidelines in January 1993, under which new  
private sector banks may be established.  Between June 1993 and  
September 1994 approval was granted for operation of 12 new foreign  
banks or bank branches.  
  
Foreign bank branches and representative offices are permitted based  
upon reciprocity and India's estimated or perceived need for financial  
services.  As a result, access for foreign banks has traditionally been  
quite limited.  Four U.S. banks now have a total of 15 branches in  
India.  They operate under restrictive conditions including tight  
limitation on their ability to add sub-branches or automated teller  
machines.  Operating ratios are determined on foreign branches local  
capital, rather then global capital of the parent institution.  
  
SECURITIES  
  
Foreign securities firms can establish non-bank financial subsidiaries  
without limits on foreign equity participation.  However, foreign  
securities firms cannot operate on the Indian stock exchanges, but must  
go through registered brokers to execute transactions.  Operating  
through Indian firms, foreign institutional investors (FII), such as  
foreign pension funds, mutual funds, and investment trusts, are  
permitted to invest in Indian primary and secondary markets.  However,  
limits of FII holdings of issued capital in individual firms apply:  
total aggregate holdings of FII's cannot exceed 24 percent of issued  
capital, and holdings by a single FII are limited to five per cent of  
the issued capital.  
  
MOTION PICTURES  
  
In the past, restrictions imposed on the motion picture industry were  
quite burdensome, costing an estimated USD 100-500 million according to  
industry estimates.  The United States pressed for removal of these  
restrictions, and received commitments from the Government of India in  
February 1992 that addressed most industry concerns.  Beginning in  
August 1992, the Indian Government began implementation of its  
commitments, introducing a number of significant changes in film import  
policy.  The GOI has carried out its commitments in good faith.  
  
A few minor issues remain of concern.  For example, films must still be  
certified by the Central Board of Film Certification before importation  
and some Indian states apply high entertainment taxes, amounting to 100  
percent of the price of admission in certain cases.  
  
More significant are concerns regarding the six million dollar annual  
ceiling applied to remittance by all foreign film producers for balance- 
of-payments reasons.  It is possible this concern will be addressed in  
India's WTO balance of payments discussions in 1995.  
  
In addition, India has continued to use a 1956 Cabinet resolution to bar  
foreign ownership of the media, preventing the approval even for joint  
ventures.  
  
TELECOMMUNICATIONS  
  
India has taken partial steps towards introducing private investment and  
competition in the supply of basic telecommunications services.   
However, licensing delays and restrictions on investors in basic  
telecommunications services have limited the value of the liberalizing  
steps taken so far.  
  
The National Telecommunications Policy announced in 1994 allows private  
participation in the provision of basic telephone services.  Foreign  
equity is limited to 49 per cent. This limit also applies to value-added  
services.  Private operators will provide services within regional  
"circles" that correspond roughly to India's states.  Private operators  
will not be permitted to operate long distance networks.  In addition,  
the policy prohibits any changes in partners for existing joint  
ventures, reducing the value of existing foreign investment and creating  
on environment that limits rapid growth in India's telecommunications  
infrastructure.  Local production requirements remain an important  
factor in negotiations to establish service operations.  
  
INVESTMENT BARRIERS  
  
The new industrial policy announced in July 1991 marked a major shift,  
relaxing or eliminating many restrictions on investment and simplifying  
the investment approval process. The changes were instituted by  
executive orders.  In order to become law, the legislation must go  
before the parliament.  
  
EQUITY RESTRICTIONS  
  
The complicated and burdensome Foreign Exchange Regulation Act (FERA)  
has been amended to liberalize foreign investment in India.  Automatic  
approval is granted by the Reserve Bank of India (RBI) for equity  
investment of up to 51 per cent in 35 industries.  The government has  
also authorized existing foreign companies to increase their equity  
holdings to 51 percent.    
  
All sectors of the Indian economy are now open to foreign investment,  
except those with security concerns, such as defense, railways and  
atomic energy.  Proposals for foreign equity participation exceeding 51  
per cent and projects considered to be "politically sensitive" are  
considered by the Foreign Investment Promotion Board (FIPB).  The FIPB  
has approved almost all the requests made for higher foreign ownership  
and for other "exceptional" cases.  
  
Though not an investment barrier per se, India's import restrictions and  
high tariffs have constrained investors from importing competitive  
inputs.  
  
OTHER BARRIERS  
  
India has an unpublished policy that encourages countertrade.  Global  
tenders usually include a clause stating that, all other factors being  
equal, preference will be given to companies willing to agree to  
countertrade.  The exact nature of offsetting exports is unspecified as  
is the export destination.  However, the Indian government does try to  
eliminate the use of re-exports in countertrade.  
  
The Indian Minerals and Metals Trading Corporation (MMTC) is the major  
countertrade body.  The State Trading Corporation (STC) handles a  
minimal amount.  Private companies are encouraged to use countertrade.   
  
Source: United States Trade Representative.  1995 National Trade  
Estimate Report on Foreign Trade Barriers, pages 141-149.  
  
  
  
                   Chapter VII.  Investment Climate  
  
INVESTMENT CLIMATE STATEMENT  
  
ECONOMIC OVERVIEW  
-----------------  
  
Four years after launching a concerted drive to modernize its economy,  
India is beginning to attract the attention of the international  
investment community.  With its two hundred million-strong middle-class,  
vast pool of skilled labor, and relatively well-developed financial  
system, India offers both a rich market and tremendous potential  
productive capacity.  U.S. investors have responded with enthusiasm to  
policies that welcome foreign investment.  The  USD 1.1 billion in U.S.  
investment projects approved by Indian authorities during fiscal year  
1994/95 made U.S. investors the largest source of foreign direct  
investment in India.  
  
For investors, the crux of the 1991 economic reforms consisted of the  
deregulation of most domestic industries, removing licensing  
requirements and permitting foreign and domestic firms far more  
independence in investment and marketing decisions.  The "New Industrial  
Policy," as it became known, included the removal of licensing  
requirements for most industries; the reduction of sectors reserved for  
government enterprises; and an increase in the equity ceiling on foreign  
investment.  Regulatory reform has been accompanied by a far more  
positive attitude toward private enterprise and foreign investment on  
the part of regulators.  
  
Agriculture is still the mainstay for 70 percent of India's 900 million  
citizens.  Most agricultural production is done either on small, family- 
owned plots or larger, feudally-organized farms.  Foreign investors are  
still prohibited from investing in farm and plantation production, but  
agricultural processing has been declared a "priority area" for foreign  
investment.  
  
In addition to fertile farmland, India is richly endowed with minerals  
such as coal, iron ore, bauxite, manganese, chromite, limestone,  
dolomite and barite -- raw materials for the manufacture of steel,  
cement and aluminum.  India's crude oil output totalled 32.3 million  
metric tons in IFY 1994/95, compared with 27 million metric tons in  
1993/94.  India's crude oil reserves are equivalent to 26 years'  
consumption at current rates.  Natural gas reserves of approximately 735  
billion cubic meters are yet to be fully tapped.    
  
The introduction of sweeping policy reform has underlined the serious  
constraints inadequate infrastructure pose to improved economic  
performance.  Electricity generation capacity at the end of IFY 1993/94  
totalled about 323,531 megawatts, with an average plant load factor of  
only 61 percent.  Despite the government's efforts to increase  
electricity generation, output remains 9-10 percent below demand.  The  
energy deficit is expected to increase until a backlog of projects  
awaiting approval come on stream.  Two of the eight "fast-track" power  
projects have received approval for the "counter-guarantees" in the last  
year.  Construction of the Dabhol power project in Maharashtra has  
begun.  However, this project now is facing a review by the newly- 
elected State Government in Maharashtra.  Other proposals are pending on  
the issue of "counter-guarantees."  To overcome controversies, the GOI  
now requires competitive bidding for power projects.  
  
India has one of the largest railway networks in the world, and fairly  
well-developed, though poorly-maintained, road systems criss-cross  
several of the more prosperous states.  However, the maintenance of  
transport infrastructure is generally poor.  Bombay is the largest port,  
handling about 25 percent of total freight.  Other major ports include  
Calcutta, Kandla, Madras, and Marmugao.  Indian Airlines and Air India  
provide domestic and international services respectively.  The  
Government has allowed the entry of seventeen private air taxis into the  
domestic aviation market.  These firms now provide service to domestic  
travellers in competition with Indian Airlines.  India's international  
passengers are also served by many foreign airlines, including Delta and  
Tower Airlines.  
  
India is linked to most other countries via telephone and telex, but the  
communications net is unreliable.  In September 1994, the GOI opened  
basic telecom services to the private sector.  Foreign partners in  
telecom joint ventures will be allowed a maximum equity of 49 percent.   
The Department of Telecommunications (DoT) issued further clarifications  
sought by the potential foreign investors in May 1995.  In addition to  
mobile cellular and basic voice telecom services, radio-paging services  
are also opened to the private sector in metros around the country.  
  
Basic industries such as steel, fertilizers, and cement account for 39  
percent of total industrial output; consumer goods, 24 percent;  
intermediate products, 21 percent; and capital goods, 16 percent.   
India's principal exports include textiles, gems and jewelry, chemicals,  
leather and marine products.  Major imports include crude oil and  
petroleum products, machinery, iron and steel and fertilizers.  
  
  
OPENNESS TO FOREIGN INVESTMENT  
------------------------------  
  
India's post-independence economic policy combined a vigorous private  
sector with state planning and control, treating foreign investment as a  
necessary evil.  Prior to 1991, foreign firms were allowed to enter the  
Indian market only if they possessed technology unavailable in India.   
Almost every aspect of production and marketing was tightly controlled,  
and many of the foreign companies that came to India eventually  
abandoned their projects.  The industrial policy announced in July 1991  
is vastly simpler, more liberal and more transparent than its  
predecessor, and actively promotes foreign investment as indispensable  
to India's international competitiveness.    
  
The new policy permits automatic approval for foreign equity investments  
of up to 51 percent, so long as these investments are made in one of 35  
"high priority" industries that account for the lion's share of  
industrial activity.  Prior to 1991, foreign equity participation was  
limited to 40 percent, and foreign investors were saddled by numerous  
operating constraints.  Foreign equity investments in excess of 51  
percent, or those which fall outside the specified "high priority"  
areas, must be approved by the Foreign Investment Promotion Board (FIPB)  
and approved by a Cabinet Committee.  The government on occasion has  
denied requests for a foreign equity stake exceeding 51 percent.  Non- 
resident Indians (NRI's) and Overseas Corporate Bodies (firms with NRI  
majority ownership) may hold 100 percent ownership in all industries  
except those reserved for the public sector.  These reserved industries  
are:  
  
- arms, ammunition and defense equipment;  
- atomic energy;  
- mineral oils;  
- minerals used in atomic energy; and   
- railway transport.  
  
To allow more NRI investments, the GOI recently allowed repatriation of  
investment in all activities, except agriculture and plantations,  
subject to certain conditions.  As of June 1995, NRIs and OCBs may  
invest on a repatriable basis in new issues of shares/debentures only of  
industrial or manufacturing companies.  
  
A number of recent policy changes have reduced the discriminatory bias  
against foreign firms.    
  
-- The government has amended exchange control regulations previously  
   applicable to companies with significant foreign participation.    
-- The ban against using foreign brand names/trademarks has been lifted.    
-- The FY 1994/95 budget reduced the corporate tax rate for foreign  
   companies from 65 percent to 55 percent.  The tax rate for domestic  
   companies was lowered to 40 percent.  
-- The long-term capital gains rate for foreign companies was lowered   
   to 20 percent; a 30 percent rate applies to domestic companies.    
-- The Indian Income Tax Act exempts export earnings from corporate  
   income tax for both Indian and foreign firms.  
  
Other policy changes have been introduced to encourage foreign direct  
and foreign institutional investment.  For instance, the Securities and  
Exchange Board of India (SEBI) recently formulated guidelines to  
facilitate the operations of foreign brokers in India on behalf of  
registered Foreign Institutional Investors (FII's).  These brokers can  
now open foreign currency-denominated or rupee accounts for crediting  
inward remittances, commissions and brokerage fees.  The condition of  
dividend balancing (offsetting the outflow of foreign exchange for  
dividend payments against export earnings) has been eliminated for all  
but 22 consumer goods industries.  A 5-year tax holiday is extended to  
enterprises engaged in development of infrastructural facilities.  Even  
without a registered office in India, foreign companies are allowed to  
start multimodal transport services in India.  The Reserve Bank of India  
(RBI) now permits 100 percent foreign investment in the construction of  
roads/bridges.  The peak custom duty rate has been reduced to 50 percent  
from 65 percent in the March 1995 budget.  Import regime changes  
included enhancement of the scope of Special Import License (SIL)  
programs, and the expansion of freely importable items on the Open  
General License (OGL) list to include some consumer goods.  
  
CONVERSION AND TRANSFER POLICIES  
--------------------------------  
  
There are no restrictions on remittances for debt service or payment for  
imported inputs.  Such transfers are made in hard currency at the  
prevailing market rates.  Dividend remittance restrictions do not apply  
to firms in the 35 high-priority industries.  There is no limitation on  
the inflow/outflow of funds for remittances of profits, capital gains,  
etc.  Remittance of funds from asset liquidation remains complex, but  
foreign firms have generally been able to liquidate assets and  
repatriate the proceeds without excessive delays.  India now allows free  
movement on current account transactions.  A local importer or foreign  
exporter are permitted to exchange domestic currency for foreign  
currency involving the purchase of foreign goods and services.  Liberal  
trade and exchange rate policies in the 1991-95 period boosted India's  
foreign reserves from less than USD 1 billion to over USD 20 billion.   
This success reduces the likelihood draconian exchange controls will be  
re-instituted.  
  
Foreign institutional investors (FII's) are allowed to open foreign  
currency accounts in designated banks along with non-resident rupee  
accounts.  The FII can transfer repatriable proceeds from the rupee  
account to the foreign currency account and vice-versa at the market  
rate of exchange.  Repatriation of capital, capital gains, dividends,  
interest income and any compensation received from the sale of rights  
offerings is permitted without approval.  However, disinvestment is  
allowed only through stock exchanges in India.  Foreign exchange is  
readily available.  In NRI accounts, only the principal amount remains  
non-repatriable; interest income is repatriable.  
  
EXPROPRIATION AND COMPENSATION  
------------------------------  
  
Since the wave of nationalizations and expropriations in the early  
1970's, there have been few instances of direct expropriation in India.   
Indeed, the current trend favors privatization of existing public  
enterprises.  In the past, compensation and due process meeting  
international standards have been observed in all cases.    
  
DISPUTE SETTLEMENT  
------------------  
  
Currently, there are no investment disputes over expropriation or  
nationalization.  Government demands for penalty payments for alleged  
overcharging by pharmaceutical companies during the 1980's could lead to  
de-facto expropriation of some foreign drug companies' assets in India.   
A committee has been named to study these longstanding disputes, but the  
failure of successive governments to produce a swift and transparent  
resolution has led to a virtual standstill in foreign investment in  
India's pharmaceutical sector.    
  
Indian courts provide adequate safeguards for the enforcement of  
property and contractual rights.  However, case backlogs frequently lead  
to long procedural delays.  India is not a member of the International  
Center for the Settlement of Investment Disputes, nor of the New York  
Convention of 1958.  Commercial arbitration or other alternative dispute  
resolution (ADR) methods are not yet popular ways of commercial dispute  
settlement in India.  The recent introduction in Parliament of a new  
Arbitration Bill signals the importance now accorded to this matter by  
the GOI.  
  
PERFORMANCE REQUIREMENTS/INCENTIVES  
-----------------------------------  
  
The current investment policy requires no local-sourcing for new and  
existing foreign investments.  In December 1992, the government removed  
all controls on dividend repatriation by foreign firms except the  
specified 22 consumer goods industries.  Earlier requirements calling  
for "dividend balancing" against exports, gradual reduction in foreign  
equity, and conditions related to technology transfer have been dropped.  
  
India has a fairly liberal plant-location policy.  In urban settings,  
non-polluting factories may be established outside a 25-kilometer  
radius.  State environmental regulations and local government zoning  
policies may affect plant location and have on occasion been a source of  
delay.  There is no requirement to employ Indian nationals, and previous  
restrictions on the employment of foreign technicians and managers have  
been eliminated, although companies continue to complain that hiring and  
compensating expatriate employees remains administratively time- 
consuming.  Special incentives are available for units set up in Export  
Processing Zones (EPZ's) and 100 percent Export Oriented Units (EOU's).   
Export units are granted incentives which include duty-free import of  
capital goods, raw materials and components; permission to sell up to 25  
percent of the production into the domestic market; exemption from  
central/state taxes on production and sales; and liberal loans and  
financing schemes from government financial institutions.   
  
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT  
--------------------------------------------  
  
Foreign investors can operate in specified priority industries or in  
EOU's.  However, a foreign-owned business entity cannot own a property  
for use in carrying out business transactions.  The Foreign Exchange  
Regulation Act (FERA) administered by the RBI allows a foreigner to own  
property in India only if it is for his residential use.  Foreign  
institutional investors (FII's), including pension funds, mutual funds,  
investment trusts and asset management companies, are now allowed to  
invest in all securities traded on India's primary and secondary  
markets, subject to initial registration with the Securities and  
Exchange Board of India (SEBI).  FII's can buy, sell and realize capital  
gains on their investments.  However, portfolio investments are subject  
to a ceiling (cumulative) of 24 percent of issued share capital in any  
one company.  The GOI has also formulated a scheme for investment by  
Non-Resident Indians (NRI's) in the housing and real-estate development  
sector.  Until recently, investment in real estate and housing was  
permitted on a non-repatriable basis.   
  
PROTECTION OF INTELLECTUAL PROPERTY RIGHTS  
------------------------------------------  
  
Indian law offers rigorous protection for copyrighted material.  In May  
1994, Parliament approved an amended Copyright Bill enlarging the scope  
of protection and introducing stiff mandatory penalties for copyright  
theft.  Trademark protection is considered good, and will be raised to  
international standards with the passage of a new Trademark Bill that  
codifies existing court decisions on the use and protection of foreign  
trademarks, including service marks.  Passage of trademark legislation  
is expected in late-1995 or early-1996.  Enforcement of intellectual  
property rights has been indifferent in the past, but is steadily  
improving as the courts and police respond to domestic concerns about  
the high cost of piracy to Indian rights' holders.  
  
Existing Indian patent law prohibits product patents for any invention  
intended for use or capable of being used as a food, medicine or drug,  
or relating to substances prepared or produced by chemical processes.   
Processes for making such products are patentable, but the patent term  
is limited to the shorter of five years from the grant of patent or  
seven years from the filing date of the patent application.  Product  
patents in other areas are granted for 14 years from the date of filing.   
As a result, "reverse engineering" of pharmaceutical products is  
widespread.  However, as a signatory to the Uruguay Round of GATT trade  
negotiations, India must introduce a comprehensive system of product  
patents no later than 2005.  The Indian Government has formed an  
advisory committee to recommend changes in the 1970 Indian Patents Act.   
A temporary Ordinance for patent protection in accordance with the WTO  
agreement was issued in December 1994.  As of June 1995, the Ordinance  
has lapsed and the Parliament's Upper House has yet to pass the Bill.  
  
REGULATORY SYSTEM  
-----------------  
  
Abolition of industrial licensing for many sectors, the convertibility  
of the rupee on trade and current account transactions, and the advent  
of a regulatory attitude more conducive to investment and competition  
have produced a marked change in the Indian investment climate.   
Investors, foreign and domestic, still complain that the regulatory  
system allows far too much leeway for bureaucratic discretion.  However,  
the volume of complaints has fallen off sharply, and the government  
appears intent upon improving the clarity and consistency of  
regulations.  The government has declared its intention to introduce  
sweeping reforms in laws and regulations dealing with the organization,  
management, and dissolution of business entities; bankruptcy; and labor  
policy.  Reform faces stiff opposition from labor unions and opposition  
political parties.  As the pace of regulatory reform at the federal  
level accelerates, the focus of liberalization is gradually shifting to  
state governments which, under India's federal system of government,  
enjoy broad regulatory powers.    
  
CAPITAL MARKETS AND PORTFOLIO INVESTMENT  
----------------------------------------  
  
The size and sophistication of India's capital markets have increased  
significantly in recent years, thanks in large measure to the entry of  
foreign institutional investors (FII's).  After registering with the  
SEBI and the Reserve Bank of India (RBI), FII's may now make portfolio  
investments in equity shares.  Foreign individuals and corporations,  
except for NRI's, are not permitted to invest directly in the stock  
market.  Disinvestment and repatriation of dividends are permitted after  
payment of capital gains taxes.  
  
The newly formed National Stock Exchange of India allows deals in  
scripless and floorless trading.  Computer workstations and reliable  
telecom links permit automated buy and sell transactions.  This system  
can offer efficient nation-wide access to investors.  Futures trading is  
still not available.  Despite their growing sophistication, Indian stock  
exchanges continue to lack adequate safeguards against manipulation, and  
suffer from inadequate custodial services, and lengthy delays in  
physical delivery of certificates.  
  
Indian firms successfully launched Euro-issues in overseas markets last  
year.  Early in 1993, several large firms entered international markets  
by issuing Global Depository Receipts (GDR's) and convertible bonds.   
The GOI has also permitted entry of Mutual Funds (known in the U.K. as  
unit investment trusts) both in public and private sectors.  SEBI  
guidelines for Mutual Funds require that a closed-ended scheme must  
raise at least Rs. 200 million (USD 6.4 million at 31:1) and open-ended  
scheme must raise Rs. 500 million (USD 16.0 million).  The RBI has now  
removed the lock-in period on investments by NRI's and OCB's under the  
Portfolio Scheme in respect of repatriation of the sale proceeds of  
shares/debentures.  
  
Interest rates and commercial bank lending policies are still regulated  
by the RBI.  Foreign investors can obtain financial assistance by way of  
loans in rupees/foreign currency from all commercial banks.  At present,  
public sector banks account for 88 percent of India's banking  
activities; regional private banks handle 5 percent; and foreign banks  
account for 7 percent.  Total deposits of India's top five banks  
amounted to Rs. 1,439 billion (USD 46 billion) as of March 31, 1993.   
Commercial banks are required to provide 100 percent reserves for  
losses.  The GOI is pressing public sector banks to improve loan  
collections, and established a special Debt Recovery Tribunal for speedy  
loan recovery in late 1993.    
  
Domestic Indian banks are required to extend 40 percent of their loans  
at concessional rates to "priority" borrowers, consisting largely of  
agriculture, exporters and small businesses.  Since July 1993, foreign  
banks have also been required to offer 32 percent of their loans to the  
non-agricultural priority sector.  The Government has taken a number of  
measures to liberalize interest rate policies, such as reducing  
statutory reserve requirements, but has prescribed floor rates on loans  
(15.5 percent) and ceiling rates on deposits (12 percent).  Commercial  
borrowers currently pay effective rates of 17-22 percent.  
  
POLITICAL VIOLENCE  
------------------  
  
There have been very few incidents of politically-motivated attacks on  
foreign projects or installations.  In the isolated instances where  
attacks have occurred, state and federal governments generally have  
responded swiftly to avoid further damage.  Violent separatist movements  
exist in Kashmir and some of the northeast states.  Violent clashes  
occur sporadically between Muslims and Hindus, and relations between  
India and Pakistan are strained.  The Indian Government acts firmly to  
maintain law-and-order in all but a few isolated corners.  
  
BILATERAL INVESTMENT AGREEMENTS  
-------------------------------  
  
The GOI places great importance on bilateral investment agreements as a  
tool to reassure foreign investors.  India has completed bilateral  
investment treaties with a number of countries, among them the U.K.,  
Germany and France.  Negotiations on investment protection agreements  
are underway with the Netherlands, Sweden and Russia.  Negotiations with  
the U.S. are stalemated because of an impasse on intellectual property  
rights protections in the bilateral investment agreement language.  
  
OPIC PROGRAMS  
-------------  
  
India  has a bilateral investment protection agreement with the U.S.  
Overseas Private Investment Corporation (OPIC).  Since 1963, OPIC has  
provided coverage for over 100 U.S. investment projects in India.  As  
the government steps up efforts to increase foreign investment, OPIC  
activities are expected to increase.    India has been a member of the  
World Bank's Multilateral Investment Guarantee Agency (MIGA) since April  
1992.   
  
LABOR   
-----   
  
India has the world's third largest pool of scientific and technical  
personnel, which serves as an important attraction for foreign  
investors.  Most managerial and technical people, and many skilled  
workers, speak English and many have studied or worked abroad.   
Unemployment and underemployment are high, providing an abundance of  
labor.  However, as in much of the developing world, illiteracy acts as  
a brake on labor productivity.  The current industrial policy provides  
for hiring of foreign technicians without prior government approval.  In  
1994, the GOI lifted restrictions on employment of foreigners in India's  
mining operations.  The RBI increased the remittable per-diem rate from  
USD 500 to USD 1,000, with an annual ceiling of USD 200,000 for services  
provided by foreign technicians payable to a foreign firm.  Technical  
personnel can remit up to 75 percent of their monthly net income through  
authorized exchange dealers.  Total duration of employment of a  
technician is limited to three months at a time.  Employment in excess  
of three months requires clearance by the Ministry of Home Affairs.  
  
Industrial relations are governed by the Industrial Disputes Act of  
1947.  The Act curbs unfair labor practices by employers, workers or  
trade unions through imposition of fines and imprisonment.  Wage  
increases are normally negotiated between unions and management.  
  
Workers' rights as defined by the International Labor Organization are  
guaranteed under the Indian Constitution.  Workers may form or join  
unions of their choice, but most trade unions are linked to political  
parties.  Not surprisingly, this has highly politicized the labor  
unions, posing problems for domestic and foreign employers.  However,  
even the Communist-led state of West Bengal, once notorious for the  
stridency of its labor unions, has moderated its activism to compete for  
investment and jobs.  India's labor scene has been remarkably quiet  
during the past three years.  Payment of wages is governed by the  
Payment of Wages Act, 1936 and Minimum Wages Act, 1948.  Industrial  
wages range from about USD 3.00 per day for unskilled labor, to over USD  
150 per month for skilled production workers.  Retrenchment, closure and  
layoffs are governed by the Industrial Disputes Act, 1947, which  
requires prior government permission to carry out layoffs/closures of  
businesses employing 100 or more workers.  In practice, permission is  
rarely given.  
  
FOREIGN TRADE ZONES  
-------------------  
  
Export Processing Zones (EPZ's) are designed to provide internationally  
competitive infrastructural facilities, and a duty-free low cost  
environment for exporters.  India has seven export processing zones  
operating, and one under development at Surat (Gujarat).  Units in these  
zones may be 100 percent foreign-owned or joint ventures with majority  
foreign equity holding.  100 percent Export Oriented Units (EOU's) can  
be established outside the zones, subject to Government approval.  All  
the incentives granted to units set up in the EPZ's are available to EOU  
units.  The Export-Import policy allows export firms duty-free import of  
all goods, including capital goods; five-year income tax exemption;  
exemption of excise tax on capital goods, components and raw materials;  
exemption of sales tax at federal/state level; and permission to sell 25  
percent of output (by value), as well as up to five percent "seconds,"  
into the domestic market against payment of appropriate taxes.  
  
The GOI requires a minimum value-addition of 20 percent for most  
products, and 60 percent for computer software and plant tissue culture.   
There is no free port at present; but Bombay is being considered for a  
free port location in the near future in order to attract greater  
foreign investment.  
  
CAPITAL OUTFLOW POLICY  
----------------------  
  
Major incentives for investment in overseas ventures include  
reimbursement of 50 percent of expenditure toward market development  
assistance; Indian ExIm Bank credit to developing countries to encourage  
project-related exports; concessional import tariffs on imports of used  
equipment for re-export by Indian investors; and 50 percent income tax  
exemption on earnings from project and consultancy services.  
  
Under the earlier policy, GOI approval was required for Indian direct  
investment overseas.  The GOI now grants "automatic" approval within 30  
days to proposals in industrial/commercial/services activities.   
However, the total direct investment by the Indian concern cannot exceed  
USD 5 million.  
  
FOREIGN DIRECT INVESTMENT STATISTICS  
------------------------------------  
  
Foreign direct investment (FDI) approvals have increased dramatically  
since the introduction of reforms in July 1991.  Over USD 4.5 billion in  
FDI was approved in 1994 - more than double the 1993 level, 4-fold the  
1992 level and about 25-times the amount logged in 1991.  The U.S. is  
the leading source of foreign direct investment in India, accounting for  
about 24 percent of total investment approved in 1994.  The following  
table provides investment approvals by major countries (in million of  
dollars):  
  
Country             1991    1992    1993     1994     1995  
                                (up to April)  
  
U.S.A               72.0   470.0   1103.0   1112.0    550.0  
U.K.                12.0    45.0    199.0    414.0     84.0  
Germany             16.0    33.0     56.0    181.0     54.0  
Mauritius            0.0     0.0     40.0    170.0     54.0  
Japan               20.0   233.0     82.0    128.0     13.4  
Netherlands         22.0    37.0    102.0     66.0     13.0  
Hong Kong            8.0    22.0     28.0     53.0     42.0  
------------------------------------------------------------  
Total Approvals    205.0  1485.0   2823.0   4522.0   1784.0  
  
Source: Secretariat for Industrial Approvals, Ministry of Industry, May  
1995.  
  
Data on countrywise inflow of capital related to direct foreign  
investment is not available.  However, the Reserve Bank of India  
maintains aggregate data on actual inflow of capital which is produced  
below: (Units = millions of U.S. dollars)  
  
Country                      1991   1992    1993    1994    1995  
                                        (Up to March)  
  
Total Inflow                136.0   228.0   568.0   946.0   710.0  
  
Source: Secretariat of Industrial Approvals, Minister of Industry, May  
1995.  
  
Indian investment in equity share capital in the 524 joint ventures  
abroad has been mainly through export of machinery, equipment, and  
technology.  Total Indian investment abroad as of December 1994 is  
estimated at Rs 1.74 billion (USD 55.4 million).  Indian firms have  
tended to locate their overseas operations in the U.K., Sri Lanka,  
Singapore, UAE and Malaysia.    
  
MAJOR FOREIGN INVESTORS  
-----------------------  
  
Major U.S. and other investments approved during the last three years  
include:  
  
Company/Country            Project                     U.S. equity  
---------------            -------                     ---------------  
  
CMS - U.S.                  Thermal Power Generation    USD 415 million  
Coca Cola - U.S.            Consumer goods              USD  70 million  
J.Makowski                  Gas-based Power             USD  40 million  
G.M. - U.S.                 Vehicles                    USD  25 million  
Guardian - U.S.             Glass                       USD  25 million  
Mount Everest - Singapore   Mineral water               USD  24 million  
Natl. Westminster Bank- UK  Banking                     USD  16 million  
G.E. - U.S.                 White goods                 USD  15 million  
R.R. Donelley  - Singapore  Software services           USD  15 million  
-----------------------------------------------------------------------  
  
Source: U.S. Embassy, compiled from published sources and press  
releases.  
  
  
  
                       VIII.  Trade and Project Financing  
  
Banking system  
  
India has an extensive banking network, in both urban and rural areas.    
As of 1991, there were 60,000 bank branches throughout the country.  All  
large Indian banks are nationalized, and all Indian financial  
institutions are in the public sector.  25 foreign banks operate in  
India with full banking licenses. Several licenses for private banks  
have been approved and these banks have already started operations.   
  
The Reserve Bank of India (RBI) is India's 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 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. 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. In terms of business, the public sector  
banks, namely   
the State Bank of India and the nationalized banks, dominate the banking  
sector.   
  
The State Bank of India (SBI) and other major nationalized banks are  
dominant.  SBI is almost wholly owned by the RBI and is India's biggest  
commercial bank.  Four national specialized financial institutions are  
the Industrial Development Bank of India (IDBI), the Industrial Finance  
Corporation of India (IFCI), the Industrial Credit and Investment  
Corporation of India (ICICI), and the Industrial Reconstruction Bank of  
India (IRBI).  
  
Foreign bank branches in India finance trade through their global  
networks.  They are permitted to accept deposits and provide credit in  
accordance with the banking laws and RBI regulations.  
  
Specialized public enterprises offer investment and insurance services.   
The Unit Trust of India (UTI) offers individuals a variety of mutual  
fund investments.  The Life Insurance Corporation of India has a  
monopoly on writing life insurance in India.  The General Insurance  
Corporation and its subsidiaries have the monopoly on casualty (fire,  
theft, etc.) insurance services.  
  
All sources of local financing are available to foreign-participation  
companies incorporated in India, regardless of the extent of foreign  
participation. Under foreign exchange regulations, foreigners and non  
residents, including foreign companies, require the permission of the  
Reserve Bank of India to borrow from a person or company resident in  
India.  
  
The Reserve Bank of India lays down restrictions on bank lending and  
other activities with large companies. These restrictions, popularly  
known as "consortium guidelines" seem to have outlived their usefulness,  
because they hinder the availability of credit   
to the non-food sector and at the same time do not foster competition  
between banks.   
  
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.  
  
All commercial banks face stiff restrictions on the use of both their  
assets and liabilities. Forty percent of loans must be directed to  
"priority sectors" and the high liquidity ratio and cash reserve  
requirements severely limit the availability of deposits for lending.  
  
The financial system remains inaccessible to the poorest people in  
India.   
  
U.S. banks having branches in India include American Express Bank, the  
Bank of America, and Citibank.  
  
Foreign exchange controls affecting trading  
  
The Indian rupee is freely convertible on the trade account.  
  
Availability of financing  
  
U.S. firms seeking rupee loans from Indian banks have encountered high  
interest rates and been locked in to such loans when banks have refused  
to accept pre-payment.  The state-owned banking sector has a well- 
deserved reputation for its sluggish pace of service, indifference to  
customer preferences, and high costs.  Bank employee unions have  
consistently fought banking automation, with the result that most  
branches of SBI and other public sector banks are still using hand- 
written ledgers and counting currency by hand for every transaction.   
Current interest rates for rupee loans (as of June 1995) are 15.5  
percent.  
  
Export finance, payment methods  
  
Finance for exports may be obtained from commercial bank branches in  
India.  State-owned commercial banks' loans for working-capital  
financing of exports is in turn refinanced by the Export-Import Bank of  
India.  Payment terms are specified by contract between the bank and the  
applicant for the loan.  
  
U.S. Export-Import Bank  
  
The Export-Import Bank of the U.S. (Eximbank) provides export finance to  
high-value capital goods and major projects.  In the past, Eximbank has  
financed the sale of Boeing 747's to Air India and a variety of capital  
equipment including electric power station generators.  
  
Overseas Private Investment Corporation  
  
OPIC has provided insurance to U.S. firms' investments in India.  For  
details of OPIC programs and services, please contact OPIC at (202) 336- 
8400.  
  
Multilateral development bank funding for projects  
  
India has a substantial amount of bank funding from the World Bank, the  
Asian Development Bank, and other multilateral development banks  
(MDB's).  This lending supports a broad portfolio of infrastructure  
development projects, from ports to telecommunications.  
  
India's sovereign risk and credit rating  
  
As of June 1995, investments in India were considered "investment-grade"  
by Moody's but below "investment-grade" by Standard and Poors.    
  
U.S. Bank branches in India:  
  
American Express Bank Ltd.  
Maker Chamber IV, 7th Floor  
Nariman Point  
Bombay 400 021, INDIA  
  
Telephone: +91-22-287-2686  
FAX: +91-22-287-2968  
  
Bank of America  
Express Towers  
Nariman Point  
Bombay 400 021, INDIA  
  
Telephone: +91-22-285-2882  
FAX: +91-22-287-0981  
  
Chemical Bank  
1008 Dalamal House, 10th Floor  
Nariman Point  
Bombay 400 021, INDIA  
  
Telephone: +91-22-243-537  
FAX: +91-22-204-3613  
  
  
Citibank N.A.  
Sakhar Bhavan, 10th Floor  
Nariman Point  
Bombay 400 021, INDIA  
  
Telephone: +91-22-202-5499  
FAX: +91-22-202-7692  
  
  
IX.  Business Travel  
  
Business Customs  
  
Time differences between India and the U.S.  
  
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 9 hours 30 minutes AHEAD of Washington, D.C., during  
daylight savings time and 10 hours 30 minutes AHEAD of Washington, D.C.,  
during standard time.  Because of the uncomfortable time differences,  
many business executives find that communicating on automatic fax  
machines or on the Internet is a practical and convenient alternative to  
real-time voice communications.  
  
India is a secular, democratic nation without a state religion.  The  
Indian Constitution protects the freedom of religion, though 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, Moslems 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 guide books 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, 1995.  
  
Indian authors writing in English provide U.S. readers 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.  
  
Travel advisory and visas  
U.S. Department of State  
Bureau of Consular Affairs  
  
[For recorded travel information, call (202) 647-5225.  To access the  
Consular Affairs Bulletin Board, call (202) 647-9225.  For information  
by fax, dial (202) 647-3000 from your fax machine.]  
  
Consular Information Sheet  
for India, November 25, 1994  
  
Country Description:  India is a developing democratic republic.   
Tourist facilities varying in degree of comfort and amenities are widely  
available in the major population centers and main tourist areas.  
  
Entry Requirements: A passport and visa (which must be obtained in  
advance) are required for entry into India for tourism or business.   
Evidence of yellow fever immunization is needed if the traveller is  
arriving from an infected area.  For further entry information, the  
traveller can contact the Embassy of India at 2536 Massachusetts Avenue,  
N.W., Washington D.C. 20008, telephone 202-939-9839 or 202-939-9850 or  
the Indian Consulates in Chicago, New York, San Francisco, Honolulu, and  
New Orleans.  
  
Terrorism:  During September/October 1994, in what appears to have been  
an isolated incident, one American and three British tourists in New  
Delhi were lured by friendly seeming members of a hitherto-unknown  
Kashmiri terrorist group and taken hostage.  After week in captivity,  
the four were released, unharmed, following a police action.  In July  
1995, two American citizen tourists in Kashmir was abducted.  
  
A series of bombings in Bombay in March 1993 killed several hundred  
people.  Foreigners were not targeted in those attacks and none were  
reported injured.  The threat of terrorist activity remains, but there  
have been no additional bombings in more than a year.  
  
Areas of Instability:  
  
Countrywide:  The potential exists for outbreaks of communal and inter- 
caste violence in most major cities.  Major civil disturbances can pose  
risks to a traveler's personal safety and can disrupt transportation  
systems and city services.  In response to communal violence, Indian  
authorities may occasionally impose curfews.  In addition, political  
rallies and demonstrations in India have the potential for violence.   
Foreigners have not been the targets of either communal or political  
violence in India, and are principally at risk only of becoming  
inadvertent victims.  U.S. citizens may contact the American Embassy or  
the nearest American Consulate General for further information about the  
current situation in areas where they wish to travel.  
  
Kashmir:  In July 1994 an American tourist was fatally shot in  
Shrinagar, and in June 1994 militant held two British hikers hostage for  
eighteen days before releasing them.  These recent events demonstrate  
that the Kashmir Valley in the State of Jammu and Kashmir remains a  
dangerous place where terrorist activities and violent civil  
disturbances continue.  
  
Uttar Pradesh:  In September and October 1994 there were numerous  
incidents of violent encounters between police and activists for a  
separate state for the hill district of Uttar Pradesh.  Dozens were  
killed and many more injured in the incidents of mob action which  
resulted in imposition of curfew and disruption of public transportation  
in many towns including Dehradun, Rishikesh, Nainital and other popular  
tourist destinations.  
  
Northeast States:  Civil unrest pervades the Northeast States.   
Terrorist groups in Assam have bombed trains, buses and bridges.  The  
government of India has declared Assam to be a "disturbed area".   
Numerous political killings have occurred in Nagaland and Manipur.   
  
India/Pakistan Border: Tensions run high between India and Pakistan,  
particularly over Kashmir.  The only official India-Pakistan crossing  
point is between Atari, India and Wagah, Pakistan.   A Pakistani visa is  
required for entry to Pakistan.  
  
Restricted Areas:  Permission from the Indian government (from Indian  
diplomatic missions abroad, or in some cases, from the Ministry of Home  
Affairs) is required to visit the states of Mizoram, Manipur, Nagaland,  
Meghlaya, Assam, Tripura, Arunachal Pradesh, Sikkim, parts of Kulu  
district and Spiti District of Himachal Pradesh, border areas of Jammu  
and Kashmir, areas of Uttar Pradesh, the west of National Highway No.  
15, running from Ganganagar to Sanchar in Rajasthan, the Andaman and  
Nicobar Islands and the Union Territory of the Laccadive Islands.  In  
June 1995, the Government announced that advance permission would no  
longer be required for travel to Meghalaya, Assam, Tripura, and Sikkim.  
  
Medical Facilities:  Adequate medical care is available in the major  
population centers, but is usually limited in the rural areas of the  
country.  Medical authorities suggest that travellers to India take  
preventive measures against malaria, hepatitis, meningitis and Japanese  
encephalitis (if arriving during the monsoon season).  Travellers  
arriving from countries where outbreaks of yellow fever have occurred  
will be required to furnish a certificate of yellow fever vaccination.   
Cholera and gastroenteritis occur during the summer monsoon months,  
mostly in the poorer areas of India.  The best protection includes  
eating only at better quality restaurants or hotels, drinking only  
boiled or bottled water and avoiding ice.  Eating untreated fruits and  
vegetables and cooked foods sold by street vendors can be risky.  
  
U.S. medical insurance is not always valid outside the United States.   
Doctors and hospitals often expect immediate payment in cash for health  
services.  Supplemental health insurance which specifically covers  
treatment and medical evacuation has proven useful.  The airplane  
interiors of international flights arriving in India may be sprayed with  
insecticides while passengers are still aboard, a practice discontinued  
in the U.S. because of human health concerns.  Additional information on  
health matters can be obtained from the U.S. Centers for Disease Control  
(CDC) international travelers hotline at 404-332-4559.  
  
Information on Crime:  Petty crime, especially theft of personal  
property, is common.  The loss or theft of a U.S. passport should be  
reported immediately to local police and the nearest U.S. Embassy or  
Consulate.  Useful information on safeguarding valuables, protecting  
personal security, and other matters while travelling abroad is provided  
in the Department of State pamphlets "A Safe Trip Abroad" and "Tips for  
Travelers to South Asia."  They are available from the Superintendent of  
Documents, U.S. Government Printing Office, Washington, D.C. 20402.  
  
Drug Penalties:  Travelers are subject to the laws and legal practices  
of the country in which they travel.  Penalties for possession, use or  
trafficking in illegal drugs are strictly enforced. Convicted offenders  
in India can expect a minimum jail sentence of ten years and fines.  
  
Customs Considerations:  Indian customs authorities strictly enforce the  
laws and regulations governing the declaration, importation or  
possession of gold and gold objects.  Travelers have sometimes been  
detained for possession of undeclared gold objects.  
  
Mountain Climbing:  Both India and Pakistan claim an area of the  
Karakoram mountain range which includes the Siachen Glacier. The two  
countries have established military outposts in the region, and armed  
clashes have occurred.  Because of this situation, U.S. citizens  
travelling to or climbing peaks anywhere in the disputed area face  
significant risk of injury and death.  The disputed area includes the  
following peaks, Rimo Peak, Apsarasas I, II and III, Tegam Kangari I, II  
and III, Suigiri Kangri, Ghaint I and II, and Indira Col, and Sia  
Kangri.  
  
Piloting Civil Aircraft:  In past years, there have been a number of  
incidents in which civil aircraft have been detained for deviating from  
approved flight plans.  U.S. citizens piloting civil aircraft in India  
must file any changes to previous flight plans and may not overfly  
restricted airspace.  
  
Registration:  U.S. citizens who register at the U.S. Embassy or at one  
of the U.S. Consulates in India can obtain updated information on travel  
and security in India and Bhutan and can obtain a copy of a booklet,  
"Guidelines for American Travelers in India."  
  
Embassy Location:  The U.S. Embassy  is located in the capital city of  
New Delhi on Shanti Path, Chanakyapuri 110 021; telephone 91-11-600651  
or 611-3033.  There are U.S. Consulates General in Bombay at Lincoln  
House, 78 Bhulabhai Desai Road, Bombay 400 026, telephone 91-22-3633611;  
in Calcutta at 5/1 Ho Chi Minh Sarani, Calcutta 700 071, telephone 91- 
33-223611 through 22-3615 and 22-2335 through 22-2337, and in Madras on  
Mount Road, Madras 600 006, telephone 91-44-473040/477542.  The workweek  
is Monday through Friday.  
  
Sources: U.S. Department of State, November 1994.  U.S. Embassy, New  
Delhi, June 1995.  
  
  
                               CHAPTER X  
  
  
APPENDIX A:  
  
COUNTRY DATA  
  
Population (October 1)   (Millions)  
  
1992/1993                  872  
1993/1994                  889  
1994/1995                  906 Estimated  
1995/1996                  923 Estimated  
  
  
Population Growth Rate    (Percent)  
  
1992/1993               1.9  
1993/1994               2.0  
1994/1995               2.0 Estimated  
1995/1996               2.0 Estimated  
  
  
Religion(s)       (Percent)  
  
Hinduism               82.6  
Muslims                11.4  
Christians              2.4  
Sikhism                 2.0  
Buddhism                0.7  
Jainism                 0.5  
Other                   0.4  
  
  
Government System  
  
Democratic and Secular  
  
Languages (18 official languages, alphabetically arranged)  
  
Assamese, Bengali, Dogri, Gujarati, Hindi, Kannarese, Kashmiri, Konkani,  
Malayalam, Manipuri, Marathi, Oriya, Punjabi, Sanskrit, Sindhi, Tamil,  
Telugu, Urdu.  
  
  
Work Week  
  
Monday through Saturday  
  
Sources:    1.   The Constitution of India  
            2.   Center for Monitoring Indian Economy Pvt. Ltd.  
            3.   Government of India Publications        
  
  
  
                         Chapter X  
  
APPENDIX B:        
  
DOMESTIC ECONOMY  
  
(Est.)                           1993/94   1994/95   1995/96  
  
Domestic Economy  
  
Nominal GDP ($ billion               250.70        290.80        329.2  
GDP in local currency   
(Rs. billion)                      2,613.20      2,751.70      2,903.0  
Real GDP Growth Rate (%)               3.50          5.30          5.5  
Per Capita GDP ($)                   281.70        320.30        355.5  
Govt. spending as % of GDP            18.00         17.80         16.4  
Inflation (Pt. to pt.-%)              10.80         10.00          9.0  
Unemployment rate (annual avg.)       22.50         22.50         22.5  
Foreign Exchange Reserves   
($ million)                       15,476.00     21,135.00     20,200.0  
Consumer Price Index (% change)        7.50          9.00         12.0  
Average Exchange Rate ($=Rs)          31.37         31.37         32.0  
Foreign Debt Stock ($ million)    90,723.00     90,500.00     92,000.0  
Debt Service Ratio (%)                25.00         27.50         28.2  
U.S. Economic Assistance   
($ million)                          141.00        142.00        155.0  
Military (IMET) ($ million)            0.36          0.15          0.2  
  
Source: U.S. Embassy, New Delhi, May 1995 Economic Trends Report  
  
  
APPENDIX C:   TRADE  
  
U.S. - India Trade            1993/94      1994/95       1995/96  
(Est.)                                 ($ Million)  
  
Total Country Exports            22,235      24,437         27,369  
Total Country Imports            23,302      25,703         30,587  
Trade Balance                    -1,067      -1,266         -3,218  
Current Account Balance          -2,178      -1,266         -3,218  
U.S. Exports to India (F.A.S.)    2,761       2,296          3,000  
U.S. Imports from India (C.I.F.)  4,551       5,302          6,362  
  
U.S. Share of India's imports     11.84       8.930           9.80  
U.S. Share of India's exports     20.00      19.200          23.20  
Imports of Mft. Goods     
U.S. Share of mfd. imports (pct)  11.67       8.82            8.24  
From the U.S.                     2,656      2,198           2,462  
Total (from World)*              22,753     24,896          29,875  
Mfd. goods trade balance with US  1,759      2,887           3,740  
Industrial Production (% change)    2.5        8.0             8.0  
Imports of Agri. Goods               -          -              -    
- Total (from World)                550      1,627           1,952  
- From the U.S.                     205        119             143  
- U.S. share of Agri. imports       37.27     7.31            7.32  
- Agri.goods trade balance (w/US)   128        315             117  
- Agri. Production (% change)       1.0        3.0             3.0  
Govt. Fiscal Deficit (as % of GDP)  7.7        6.1             5.5  
Tourism Receipts/               1,660/600   1,750/800   2,269/1,027  
Expenditure  
  
Trade balance with three leading partners in 1993  
  
Japan    + 219  
Germany  - 251  
U.K.     - 157  
  
Five principal U.S. Exports to India (CY-1993)  
  
H.S. CODE   INDUSTRY SECTOR   U.S. $ MILLION  
  
8802   Aircraft                         581  
3100   Fertilizers                      171  
8411   Turbopropellers & Gas Turbines   167  
8803   Parts of Balloons, Aircraft &   
       Spacecraft etc.                  117  
8431   Parts for Machinery               93  
  
5 principal US Imports from India (CY-1993)  
  
H.S. CODE   INDUSTRY SECTOR   U.S. $ MILLION  
  
7102   Diamonds                        1,243  
6206   Women's or Girls' Blouses         271  
6204   Women's or Girls' Suits           259  
7113   Articles of Jewellery & parts     160  
6205   Men's or Boy's Shirts             134  
  
Exchange Rate of $ 1 = Rs. 31.37  
  
GOI provides fiscal data (April 1 to March 31).  Therefore, the average  
for calendar year has been provided.  
  
*   These data are not available in published form.  Therefore, imports  
of manufactured goods total from world have been taken after deducting  
agricultural goods.  
  
  
APPENDIX D:   INVESTMENT STATISTICS  
  
Foreign Direct Investment (FDI)  
  
A.  The rush of FDI's to India has been doubling annually in the last  
four years.  The U.S. continues to lead the FDI country matrix,  
accounting for 24 percent of the total investment approved in 1994 and  
about 16 percent in 1995 (based on figures available as of March 1995).   
According to the Center for Monitoring of the Indian Economy, the  
increase in foreign direct investment intentions is indicated in the  
ratio of foreign investment proposals to the total project cost of  
investment proposals, approved through letters of intent and industrial  
entrepreneurs' memoranda.  This ratio increased from 3 percent in 1992  
to 13 percent in 1994.    
  
The following table 'A' provides Foreign Direct Investment proposals by  
countries (in millions of U.S. dollars):   
  
Table A  
  
Country              1992      1993      1994      1995  
                               (up to March)  
  
U.S.A.               499.6   1,107.8   1,125.2   276.6  
Germany               20.7      56.3     183.7    49.6  
U.K.                  47.7     199.3     419.1    35.0  
Singapore             28.2      24.1      85.6    18.7  
Hongkong              26.7      31.8      53.2    14.4  
Australia             36.4      10.7     125.2    14.1  
Korea(S)              18.5      10.6      34.5     7.6  
Japan                247.6      82.4     129.3     7.0  
Italy                 41.9      42.4     126.1     3.2  
Netherlands           39.3     102.9      66.8     3.1  
-------------------------------------------------------  
Total Approvals     1,577.1   2,835.0   4,577.0   776.9  
  
The figures available for 1994 are somewhat confusing.  The month-by- 
month approvals during 1994 total USD 2.88 billion.  However, the  
country-by-country break-up indicates USD 4.57 billion.  An unusually  
large component of the USD 4.57 billion, approximating USD 1.71 billion,  
shows up in the non-specified or "other countries" list and includes  
Euro issues of about USD 168 million.  If, therefore, this amount is  
excluded, the foreign collaboration approvals stagnated during 1994 at  
1993 levels.  
  
Sources:   
  
A.   Secretariat for Industrial Approvals, Ministry of Industry,  
     February 1995.   
B.   Indian Investment Center, March 1995.  
  
Foreign Investment      
  
                                1992      1993      1994  
  
Total (Stock)                    238       571       950  
U.S. (Stock)                      40       153       108  
U.S. share (percent)              17        27        11  
  
  
APPENDIX D:  
  
B.  The following table 'B' provides the data on inflow of capital by  
country, related to Direct Foreign Investment (in millions of dollars):  
     
   Table 'B'  
  
Country                       1992        1993        1994      1995  
                                          (upto March)  
  
U.S.A                          40.3       153.3      108.3      89.0  
Japan                          24.9        21.9       87.7      18.9  
Germany                        20.0        12.8       42.0      15.2  
U.K.                           26.2        74.2      137.9      11.5  
Netherlands                     5.1        36.2       45.7       8.8  
Switzerland                    18.9        34.2       26.4       2.3  
  
Total Approvals               238.8       571.5      950.9     562.4  
  
There is a substantial lag between approvals for foreign investment and  
the actual flow of foreign investments into the country.  Actual foreign  
direct investment flows rose from  USD 146.2 million in 1991 to USD  
950.9 million in 1994.  
  
Sources:   
  
A.  Secretariat for Industrial Approvals, Min. of Industry, March 1995  
B.  Center for Monitoring Indian Economy Pvt. Ltd., Economic  
    Intelligence Service  
C.  Indian Investment Center  
  
Thirty percent of the cumulative foreign investment approvals is in the  
fuels' sector.  In this, the pace of conversion of approvals into actual  
inflow would be slow and low, particularly in the power industry where  
there are reappraisals of some proposals of foreign companies.  The  
recent change in Government in the states of Maharashtra, Orissa and  
Andhra Pradesh has already led to investigations into two of these  
projects - the Dabhol Power Corporation's power project in Maharashtra  
and AES Transpower's project in Orissa.  
  
Metallurgical industries account for 16 percent of the foreign  
investments approved and chemicals (excluding fertilizers) account for  
another 11 percent.  One seventh of the total approvals were for the  
service sectors.  Banks and financial services, hospitals and medical  
centers and data management and information analysis segments attract  
significant proposals from overseas.  
  
India has already witnessed a substantial investment into the consumer  
goods industries such as soft drinks and other food processing.   
However, investments into the infrastructure regions have not made much  
progress largely on account of tardy progress in setting up the  
institutional framework to attract investments from the Indian private  
sector or abroad.     
  
D.  Comparable Data on Host Country's Direct Investment Abroad:    
  
Indian investment in equity share capital abroad has been largely  
through export of machinery and equipment/technology.  The total Indian  
investment abroad upto December 1994 is estimated at USD 509 million.   
Indian firms have located their operations in the U.K., Sri Lanka,  
Singapore, Thailand, Malaysia, the UAE, Nigeria, Bangladesh, Nepal and  
Kenya.  
  
  
APPENDIX D:  
  
The following table 'C' provides:  
  
   HOST COUNTRY'S  
   Summary of Joint Ventures Abroad  
   as on December 31, 1994.  
  
Note: Statistics are not readily available in calendar years.  
  
Country          In-operation   Under Implementation   Total    Total  
NOC Equity           $ mill.      $ mill.             $ mill.  
  
Africa                 28       22.7      17      3.5      45      26.2  
* Americas             12        4.0      35     65.6      47      69.6  
USA Figure            (10)      (3.8)    (28)   (56.9)    (38)    (60.7)  
East Asia              63       19.3      70     53.0     133      72.3  
Europe                 25        3.2     120     84.0     145      87.2  
Oceania includes  
Japan & Australia       4        0.12      7      7.8      11       7.9  
South Asia             25        4.8      47     34.2      72      39.0  
West Asia              20        4.3      51    203.0      71     207.3  
  
Total                 177       58.42    347    451.1     524     509.52  
  
*. NOC: Number of collaborations  
   USA figure is included in Americas  
  
Source:   Indian Investment Center, New Delhi   
  
  
APPENDIX D  
  
Name of Industry  
  
                             Total      Tech   Fin   Value  
                                         $ mill.  
  
Metallurgical   
Industries                    236        144          92      1,238.84  
Fuels                         113         43          70      2,225.73  
Boilers and Steam  
Generating Plants              35         23          12         19.38  
Prime Movers (Other  
than electrical  
Generators)                     9          7           2          0.74  
Electricals Equipment         971        488         483        585.76  
Telecommunications             86         55          31         66.32  
Transportation Industry       246        155          91        561.65  
Industrial Machinery          572        402         170        284.47  
Machine Tools                  74         43          31         13.57  
Agricultural Machinery         22         18           4         53.78  
Earth-Moving Machinery         34         23          11          4.32  
Miscellaneous Mechanical  
& Engineering Industry        201        104          97         45.89  
Commercial, Office &   
Household Equipment            39         22          17         27.18  
Medical &   
Surgical Appliances            23          8          15          6.16  
Industrial Instruments         76         50          26          6.41  
Scientific Instruments         23          8          15         11.61  
Fertilizers                    21         18           3          1.21  
Chemicals (other than   
Fertilizers)                  662        408         254        794.62  
Photographic Raw Film   
& Paper                         8          4           4          6.87  
Dye-Stuffs                      7          2           5          1.98  
Drugs & Pharmaceuticals       110         60          50         74.25  
Textiles   
(include Dyed, Printed)       199         59         140        387.78  
Paper & Pulp including   
paper product                  60         34          26        130.81  
Sugar                           2          0           2         17.83  
Fermentation Industries        31          9          22         69.29  
Food Processing Industries    327         74         253        669.56  
Vegetable Oils & Vanaspati     20          2          18          9.62  
Soaps, Cosmetics & Toilet  
Preparations                   18          6          12         14.65  
Rubber Goods                   71         43          28         32.06  
Leather, Leather Goods   
& Pickers                      80         19          61         23.64  
Glue & Gelatin                  -          -          -            -    
Glass                          28         15          13         60.27  
Ceramics                       98         36          62         89.23  
Cement & Gypsum Products       34         17          17        126.99  
Timber Products                 2          1           1          0.03  
Defense Industries              2          2           0          0.00  
Consultancy Services          106         33          73         13.89  
Service Sector                179          6         173        802.74  
Hotel & Tourism                91         30          61        365.39  
Trading Co.                   114          0         114         21.94  
Miscellaneous Industries      454        272         182        257.27  
  
Total                        5484       2743        2741       9123.92  
  
*  Tech is technical collaborations  
   Fin is financial collaborations  
  
Source:   Indian Investment Center, New Delhi.  
  
  
APPENDIX E:   WASHINGTON-BASED USG COUNTRY CONTACTS  
  
Richard Harding  
India Desk Officer  
Office of South Asia  
U.S. Department of Commerce  
14th & Constitution Avenue N.W.  
Washington, D.C. 20230  
Tel: 202-482-2954  
Fax: 202-482-5330  
  
Lewis P. Reade  
Director General  
United States-Asia Environmental Partnership Program  
(USAEP)  
1133 20th Street NW  
Suite 300  
Washington, D.C. 20036  
Tel: 202-835-0333  
Fax: 202-835-0366  
  
Dan Stein  
Director  
U.S. Trade and Development Agency  
Room 309, SA-16  
Washington, D.C. 20523-1602  
Tel: 703-875-4357  
Fax: 703-875-4009  
  
Maurice A. Johnson  
Regional Manager, Insurance  
Africa/Asia/Middle East  
Overseas Private Investment Corporation  
1100 New York Avenue, N.W.  
Washington, D.C. 20527  
Tel: 202-336-8485  
Fax: 202-408-9866  
  
Terrence J. Hulihan  
Acting Vice President  
Export-Import Bank of the United States  
811 Vermont Avenue, N.W.  
Washington, DC 20571  
Tel: 202-566-8714  
Fax: 202-566-7524  
  
U.S.-BASED MULTIPLIERS RELEVANT FOR COUNTRY  
  
U.S.-India Business Council  
U.S. Chamber of Commerce  
1615 H. Street, N.W.  
Washington, D.C. 20062-2000  
Tel: 202-463-5492  
Fax: 202-463-3173  
  
  
U.S. EMBASSY TRADE PERSONNEL  
  
Douglas Hartwick  
Economic Counselor  
U.S. Embassy  
Shantipath Chanakyapuri  
New Delhi 110021  
Tel: 91-11-611-3033  
Fax: 91-11-687-2028  
  
Curtis Stone  
Economic Officer  
U.S. Embassy  
Shantipath Chanakyapuri  
New Delhi 110021  
Tel: 91-11-611-3033  
Fax: 91-11-687-2028  
  
Jack Robinson  
Economic Officer  
U.S. Embassy  
Shantipath Chanakyapuri  
New Delhi 110021  
Tel: 91-11-611-3033  
Fax: 91-11-687-2028  
  
Mr. Walter G. Bollinger  
Director  
United States of America  
Agency for International Development  
USAID Building  
B-28 Institutional Area  
New Mehrauli Road  
Near Qutab Hotel  
New Delhi 110016  
Tel: 91-11-686-5301  
Fax: 91-11-686-8594  
  
Mr. Richard Goldman  
Trade Development Enterprises  
United States of America  
Agency for International Development  
USAID Building  
B-28 Institutional Area  
New Mehrauli Road  
Near Qutab Hotel  
New Delhi 110016  
Tel: 91-11-686-5301  
Fax: 91-11-686-8594  
  
Jonathan M. Bensky  
Counselor for Commercial Affairs  
U.S. & Foreign Commercial Service  
U.S. Embassy  
Shantipath, Chanakyapuri  
New Delhi 110021  
Tel: 91-11-611-3033  
Fax: 91-11-687-2391  
  
Michael Benefiel  
Commercial Attache  
U.S. & Foreign Commercial Service  
U.S. Embassy  
Shantipath, Chanakyapuri  
New Delhi 110021  
Tel: 91-11-611-3033  
Fax: 91-11-687-2391  
  
Tim Gilman  
Commercial Attache  
U.S. & Foreign Commercial Service  
U.S. Embassy  
Shantipath, Chanakyapuri  
New Delhi 110021  
Tel: 91-11-611-3033  
Fax: 91-11-687-2391  
  
John Wood  
Commercial Consul  
U.S. & Foreign Commercial Service  
American Center  
4 New Marine Lines, Bombay 400020  
Tel: 91-22-262-4590  
Fax: 91-22-2623850  
  
Michael Keaveny  
Commercial Consul  
U.S. & Foreign Commercial Service  
American Consulate General  
Mount Road, Madras 600006  
Tel: 91-44-827-3040  
Fax: 91-44-825-0240  
  
Ashok Kanjilal  
Commercial Specialist  
U.S. & Foreign Commercial Service  
American Consulate General  
5/1 Ho Chi Minh Sarani  
Calcutta 700071  
Tel: 91-33-242-3611  
Fax: 91-33-242-2335  
  
Leonard Roberts  
Commercial Specialist  
U.S. & Foreign Commercial Service  
Sunrise Chambers  
22 Ulsoor Road  
Suite W-202 IInd Floor  
Bangalore 560042  
Tel: 91-80-558-1452  
Fax: 91-80-558-3630  
  
Victor D'Souza  
Market Research Director  
Foreign Commercial Service  
American Center, 24 Kasturba Gandhi Marg  
New Delhi 110001  
Tel: 91-11-3316841  
  
COUNTRY TRADE ASSOCIATIONS/CHAMBERS OF COMMERCE  
  
Tarun Das  
Director General  
Confederation of Indian Industry (CII)  
23-26  Institutional Area  
Lodi Road  
New Delhi 110003, India  
Tel: 91-11-462-9994  
Fax: 91-11-463-3168  
  
Dr. Amit Mitra  
Secretary General  
Federation of Indian Chambers of Commerce & Industry  
(FICCI)  
Federation House  
Tansen Marg  
New Delhi 110001, India  
Tel: 91-11-331-9251  
Fax: 91-11-332-0714  
  
V. Raghuraman  
Secretary General  
The Associated Chambers of Commerce & Industry of India  
(ASSOCHAM)  
Allahabad Bank Building  
17 Parliament Street  
New Delhi 110001, India  
Tel: 91-11-310-704  
Fax: 91-1-312-193  
  
Harish Tandon  
Secretary General  
PHD Chamber of Commerce & Industry  
PHD House  
Opp. Asian Games Village  
New Delhi 110016, India  
Tel: 91-11-686-3801  
Fax: 91-11-686-3135  
  
V. Rangaraj  
Executive Director  
Indo-American Chamber of Commerce  
1-C Vulcan Insurance Building  
Veer Nariman Road, Churchgate  
Bombay 400020, India  
Tel: 91-22-221-413  
Fax: 91-22-204-6141  
  
Dewang Mehta  
Executive Director  
National Association of Software and Service Companies  
(NASSCOM)  
Ashok Hotel, #109  
Chanakyapuri  
New Delhi 110021, India  
Tel: 91-11-688-5474  
Fax: 91-11-688-5475  
  
Subhash Chopra  
Secretary General  
Manufacturers' Association for Information Technology  
(MAIT)  
PHD House, 4th Floor  
Opp. Asian Games Village  
New Delhi 110016, India  
Tel: 91-11-685-5487  
Fax: 91-11-685-1321  
  
Secretary General  
Indian Machine Tool Manufacturers' Association (IMTMA)  
17 Nangal Raya Commercial Complex  
Nangal Raya  
New Delhi 110046, India  
Tel: 91-11-559-2814  
Fax: 91-11-559-9882  
  
Vishnu Mathur  
Executive Director  
Automotive Component Manufacturers Association of India  
(ACMA)  
203-205 Kirti Deep Building  
Nangal Raya Business Center  
New Delhi 110046, India  
Tel: 91-11-550-1669  
Fax: 91-11-550-3101  
  
Ghanisham Das  
Secretary General  
Electronic Component Industries Association (ELCINA)  
408 & 707 Sahyog Building  
58 Nehru Place  
New Delhi 110019, India  
Tel: 91-11-642-8274  
Fax: 91-11-643-1397  
  
Secretary General  
Telecom Equipment Manufacturers Association of India  
(TEMA)  
B-142 Lajpat Nagar-I, 1st Floor  
New Delhi 110024, India  
Tel: 91-11-691-5446  
Fax: 91-11-691-8684  
  
Secretary General  
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: 91-11-642-4925  
Fax: 91-11-647-0947  
  
Secretary General  
All India Instrument Manufacturers and Dealers Association  
(IMDA)  
Navyug Niwas  
167 Dr. D. Bhadkamkar Road  
Opp. Minerva Theatre  
Bombay 400007, India  
Tel: 91-22-307-1868  
  
Secretary General  
Builders Association of India  
G-1/G 20 Commerce Centre  
7th Floor, J. Dadajee Road  
Tardeo, Bombay 400034, India  
Tel: 91-22-494-0707  
Fax: 91-22-494-0707  
  
Secretary General  
Indian Drug Manufacturers' Association  
102 B Poonam Chambers  
Dr. A. Besant Road, Worli  
Bombay 400018, India  
Tel: 91-11-493-0786  
  
Secretary General  
Indian Electrical & Electronics Manufacturers  
Association (IEEMA)  
501 Kakad Chambers - 5th Floor  
132 Dr. Annie Besant Road, Worli  
Bombay 400018, India  
Tel: 91-11-493-2705  
  
Secretary General  
Organization of Pharmaceutical Producers of India  
Cook's Building, 324 Dr. D.N. Road  
Fort, Bombay 400001, India  
Tel: 91-11-204-5509  
  
COUNTRY GOVERNMENT OFFICES:  
  
Tejendra Khanna  
Secretary  
Ministry of Commerce  
Government of India  
Udyog Bhavan  
Maulana Azad Road  
New Delhi 110011, India  
Tel: 91-11-301-6664  
Fax: 91-11-301-4418  
  
M.S. Ahluwalia  
Secretary  
Ministry of Finance  
Government of India  
North Block  
New Delhi 110001, India  
Tel: 91-11-301-2611  
Fax: 91-11-301-6075  
  
M.C. Gupta  
Secretary  
Ministry of Industry  
Government of India  
Udyog Bhavan  
Rafi Marg  
New Delhi 110011, India  
Tel: 91-11-301-0221  
Fax: 91-11-301-2626  
  
A.N. Varma  
Principal Secretary to the  
Prime Minister's Office  
Foreign Investment Promotion Board (FIPB)  
Prime Minister's Office  
Government of India  
South Block  
New Delhi 110011, India  
Tel: 91-11-301-7839  
Fax: 91-11-301-6857  
  
Salman Haider  
Foreign Secretary  
Ministry of External Affairs  
Government of India  
South Block  
New Delhi 110011, India  
Tel: 91-11-301-2318  
Fax: 91-11-301-6781  
  
N. Vittal  
Secretary  
Ministry of Electronics  
Government of India  
Electronics Niketan  
6 CGO Complex  
New Delhi 110003, India  
Tel: 91-11-436-4041  
Fax: 91-11-436-3134  
  
Yogesh Chandra  
Secretary  
Ministry of Civil Aviation & Tourism  
Government of India  
Rajiv Gandhi Bhavan  
Safdarjung Airport  
New Delhi 110003, India  
Tel: 91-11-461-0358  
Fax: 91-11-4602397  
  
K.K. Mathur  
Secretary  
Department of Chemicals & Petrochemicals  
Ministry of Chemicals and Fertilizers  
Government of India  
Shastri Bhavan  
Dr. Rajendra Prasad Marg  
New Delhi 110001, India  
Tel: 91-11-382-467  
Fax: 91-11-387-892  
  
Kamal Nath  
Minister of State  
Ministry of Environment & Forests  
Government of India  
Paryavaran Bhavan  
CGO Complex  
Phase-II, New Delhi 110003, India  
Tel: 91-11-462-9133  
Fax: 91-11-436-2222  
  
R.K. Takkar  
Chairman  
Telecom Commission  
Ministry of Communications  
Government of India  
Sanchar Bhavan  
Ashoka Road  
New Delhi 110001, India  
Tel: 91-11-371-9898  
Fax: 91-11-3711514  
  
T.R. Prasad  
Secretary  
Ministry of Food Processing Industries  
Government of India  
Transport Bhavan  
Parliament Street  
New Delhi 110001, India  
Tel: 91-11-371-1687  
Fax: 91-11-371-3030  
  
Ministry of Health & Family Welfare  
Government of India  
Nirman Bhavan  
Maulana Azad Marg  
New Delhi 11001, India  
Tel: 91-11-301-8863  
  
Bhaskar Ghosh  
Secretary  
Ministry of Information and Broadcasting  
Government of India  
Shastri Bhavan  
Dr. Rajendra Prasad Road  
New Delhi 110001, India  
Phone: 91-11-382639  
Fax: 91-11-382513  
  
L.M. Menezes  
Secretary  
Ministry of Non-Conventional Energy Sources  
Government of India  
Block 14  
CGO Complex  
Lodhi Road  
New Delhi 110003, India  
Tel: 91-11-436-1481  
Fax:91-11-436-1298  
  
V. Kelkar  
Secretary  
Ministry of Petroleum & Natural Gas  
Government of India  
Shastri Bhavan  
Dr. Rajendra Prasad Road  
New Delhi 110001, India  
Tel: 91-11-383-501  
Fax: 91-11-383-585  
  
Ministry of Planning  
Government of India  
Sardar Patel Bhavan  
Parliament Street  
New Delhi 110001, India  
Tel: 91-11-371-6302  
  
R. Vasudevan  
Secretary  
Ministry of Power  
Government of India  
Shram Shakti Bhavan  
Rafi Marg  
New Delhi 110001, India  
Tel: 91-11-371-7474  
Fax: 91-11-371-0071  
  
G.K. Khare  
Chairman-Railway Board  
Ministry of Railways  
Government of India  
Rail Bhavan  
Rafi Marg  
New Delhi 110001, India  
Tel: 91-11-301-7061  
  
Dr. P. Rama Rao  
Secretary  
Department of Science & Technology  
Ministry of Science & Technology  
Government of India  
Technology Bhavan  
New Mehrauli Road  
New Delhi 110016, India  
Tel: 91-11-661439  
Fax: 91-11-686-3847  
  
Moosa Raza  
Secretary  
Ministry of Steel  
Government of India  
Udyog Bhavan  
Maulana Azad Marg  
New Delhi 110011, India  
Tel: 301-5489  
Fax: 91-11-301-3236  
  
C.M. Ramdas  
Secretary  
Ministry of Surface Transport  
Government of India  
Privahan Bhavan  
Parliament Street  
New Delhi 110001, India  
Tel: 91-11-371-0121  
  
S.R. Sathyam  
Secretary  
Ministry of Textiles  
Government of India  
Udyog Bhavan  
Maulana Azad Marg  
New Delhi 110011, India  
Tel: 91-11-301-1769  
  
Dr. M.S. Reddy  
Secretary  
Ministry of Water Resources  
Government of India  
Shram Shakti Bhavan  
Rafi Marg  
New Delhi 110001, India  
Tel: 91-11-371-0305  
  
Dr. C. Rangarajan  
Governor  
Reserve Bank of India  
Exchange Control Department  
Shaheed Bhagat Singh Road  
P.B. No. 1055  
Bombay 400023, India  
Tel: 91-22-286-1602  
Fax: 91-22-266-5330  
  
COUNTRY MARKET RESEARCH FIRMS  
  
Mr. R. D. Deshpande  
Consulting Advisor  
Tata Consultancy Services  
A Division of TATA Sons Limited  
Tata Research Development & Design Center  
1 Mangaldas Road  
Pune 411001, Maharashtra, India  
Tel: (0212) 622809  
FAX: (0212) 623713  
Tlx: 0145-7464 TCSP IN  
  
Mr. Sanjeev Bikhchandani  
Managing Director  
Info Edge  
Info House, A-6 Swasthya Vihar  
Vikas Marg  
New Delhi 110092, India  
Tel: 91-11-2248623  
FAX: 91-11-2223425  
  
Dr. A. Mukherjee  
Director  
C.P. Consultants Pvt. Ltd.  
B-223, Chittaranjan Park,  
New Delhi 110019, India  
Tel: 91-11-6420023  
FAX: 91-11-6474514  
Telex: 031-70260 SCGT-IN  
  
Mr. Samir Parkash  
Director  
Resource Group  
A-78, Nizamuddin East  
New Delhi 110013, India  
Tel: 91-11-4624886, 4642631  
FAX: 91-11-4629147  
  
Mr. K. M. S. Ahluwalia  
Chairman  
Marg Marketing & Research Group Pvt. Ltd.  
30th Floor, World Trade Center  
1 Cuffe Parade  
Bombay 400 001, India  
  
Mr. Rohit Churamani  
Information Executive  
Indian Market Research Bureau  
Central Hall  
Khan Market  
New Delhi 110003, India  
Tel: 698678, 616008, 4623241  
  
Mr. Shankar Venkateswaran  
Director  
A.F. Ferguson & Co.  
6 H, Hansalaya  
Barkhamba Road  
New Delhi 110001, India  
Tel: 3313543, 3315256, 3315266  
Telex: 031-62972  
FAX: 91-11-3325437  
  
Mr. Ejaz Hoda  
Chairman  
Market Pulse  
A-89, First Floor  
Malviya Nagar  
New Delhi 110001, India  
Tel: 91-11- 6212787  
FAX: 91-11-6425433  
  
Mr. Lalit Ahluwalia  
Arthur Andersen & Co.  
426 World Trade Center Bldg.  
Barakhamba Road  
New Delhi 110001, India  
Tel:91-11-3313869, 3313886  
FAX: 91-11-371 2903  
  
Mr. Deepak Kapoor  
Partner  
Price Waterhouse  
7E/H Vandhana  
11 Tolstoy Marg  
New Delhi 110001, India  
Tel: 91-11-3314591, 3316157  
FAX: 91-11-332-3183/371165  
  
Mr. Arvinder S. Brara  
Managing Director  
Mantec Consultants Pvt. Ltd.  
805 Vishal Bhavan  
95 Nehru Place  
New Delhi 110019, India  
Tel: 91-11-6429294-6, 632435, 6849023  
FAX: 91-11-6842531  
Tlx: 31-75330 GURU IN  
  
Dr. B.P. Lamba  
Chairman  
Chanakya Consultants Pvt. Ltd.  
D-10/G, DDA Rockview Apartments,  
Munirka, New Delhi 110067, India  
Tel: 91-11-6850412, 6866199  
FAX: 91-11-6862358  
  
Mr. Anil Aneja  
A. Aneja & Co.  
3A/3 Asaf Ali Road  
New Delhi 110002, India  
Tel: 3274962, 3287592  
FAX: 91-11-3282179  
Tlx: 031-61964 NDEC IN  
  
Mr. Chetan Sharma  
Managing Director  
Datamation Consultants Pvt. Ltd.  
B-30 Madhuban Indraprastha Extension  
New Delhi 110092  
Tel: 91-11-2222320, India  
FAX: 91-11-2243087  
  
Mr. Ajay Khullar  
Chief Executive  
Khullar Management and Financial Investment Consultants  
B-114 Amar Colony  
Lajpat Nagarv IV  
New Delhi 110024, India  
Tel: 91-11-6436518  
Tlx: 031-70346 AMPL IN  
FAX: 91-11-6476167  
  
Mr. Inderjeet Sabharwal  
Chairman  
S.I. Consultants  
127 Thapar Chambers-II  
Opp. Kalindi Colony  
Ring Road  
New Delhi 110014, India  
Tel:91-11-6823148  
FAX:91-11-6437922  
  
Mr. Vibhu Kumar  
Managing Director  
3 Aces Consultants  
711 Shakuntala Building  
59 Nehru Place  
New Delhi 110019, India  
Tel: 91-11-6429088  
Tlx: 031-71477 ARP IN  
FAX: 91-11-6448947  
  
Mrs. Ashmita Ray  
Director  
IQ Group  
A-48 Kailash Colony  
New Delhi 110048, India  
Tel: 91-11-6414170  
FAX: 91-11-6463593  
  
Mr. P.K.V. Krishnan  
Director  
Sarasuba Entrepreneurs Private Limited  
B-164 Priyadarshini Vihar  
Delhi 110092, India  
Tel: (O) 2249845, (R) 2242255  
  
Mr. R.K. Jain  
General Manager  
Industrial Techno-Economic Services Pvt. Ltd.  
7 Community Centre  
East of Kailash  
New Delhi 110065, India  
Tel: 643 2335, 644 3885  
FAX: 91-11-6440866   
  
Mr. R. Parthasarathy  
Olympus & Management Consultants  
B-23, Hill View Apartments  
Vasant Vihar  
New Delhi 110057, India  
Tel: 91-11-6881097/6111369  
  
Scientific Analyzers of Market Information and Research  
Ahmedabad House  
AB-6 Community Centre  
Safdarjung Enclave  
New Delhi 110029, India  
Tel: 6876380, 6883458  
FAX: 91-11-6876522  
  
Mr. Rajiv Desai  
President  
Indian Public Affairs Network  
310 Mercantile House  
15 Kasturba Gandhi Marg  
New Delhi 110001, India  
Tel: 3755192  
FAX: 91-11-371 4713  
  
Mr. Prashant Srivastava  
Admar Services Pvt. Ltd.  
4 Jia Sarai, Near IIT  
New Delhi 110016, India  
Tel and FAX: 91-11-686 7799  
Tlx: 031-73209  
  
Mr. M.S.S. Varadan  
Managing Director  
Om Consultants (India) Pvt. Ltd.  
84, 9th Cross,  6th Main  
P.B. 356 Malleswaram  
Bangalore 560 003, India  
Tel: 368228, 368209  
Tlx: 0845-2170 OMC IN  
  
Mr. Nirmal Kumar Rath  
Branch Manager  
Kirloskar Consultants Limited  
107 Qutab View Apartments  
(Opp. Qutab Hotel) Jeet Singh Marg  
New Delhi 110016, India  
Tel: 91-11-6963659/662101/3760477  
Tlx: 031-73153  
FAX: 91-11-6854001/6852407  
Voice Mail Box: 3760477  
  
Mr. V. K. Laroia  
Managing Director  
Industrial Development Services Pvt. Ltd.  
M I Kanchenjunga   
Barakhamba Road  
New Delhi 110001, India  
Tel: 3312287  
FAX:91-11-3316470  
Tlx: 031-62650 IDS IN  
  
Mr. Atul Dhawan  
Managing Partner  
S. B. Billimoria & Co.  
501 Meghdoot  
94 Nehru Place  
New Delhi 110019, India  
Tel: 91-11-6419137  
FAX: 91-11-6449573  
Tlx: 031-3452 SBB IN  
  
Sri Ram Khanna  
Chairman  
International Business Consultants  
108 Golf Links  
New Delhi 110003, India  
Tel: 91-11-4620455/4643062  
FAX: 4626189/4620455  
  
Ms. Harleen Kaur  
Business Horizons  
Z-26 Hauz Khas  
New Delhi 110016, India  
Tel: 011-666015  
Tlx: 72202 ETC IN  
  
Mr. Chetan Sharma  
Director  
S.S. Business Consultancy Services  
B-30 Madhuban, Indra Prastha Extension  
New Delhi 110092, India  
Tel: 224 5887  
Tlx: 031-62185 DATA IN  
FAX: 91-11-2243087-6862196  
MCI MAIL ID# 620-3762  
  
Dr. Anand G. Naik-Kurade  
Chief Executive  
Suman Food Consultants  
Sangam Sagar  
B-168 East of Kailash  
New Delhi 110065, India  
Tel: 633391  
FAX: 6464000  
  
Mr. Parveen Ahluwalia  
Director - Consumer Insights  
Rediffusion  
58 Community Center  
Basant Lok  
Vasant Vihar  
New Delhi 110057, India  
Tel: 675820, 607458, 606976  
FAX: 011-6877455  
Tlx: 031-72150 RAPL IN  
  
Mr. Ajay Muttreja  
Industrial Expert  
Tecnova India Pvt. Ltd.  
109 Aurobindo Place  
Sri Aurobindo Marg  
New Delhi 110016, India  
Tel: 668810, 655766  
Tlx: 031-4548 TECN IN  
FAX: 91-11-6437999   
  
Mr. Pradeep Dikshit  
Finatech Consultants  
C-307, Sarita Vihar  
New Delhi 110044, India  
Tel: 91-11-6823076  
  
Mr. Arvind Kumar  
Regional Manager  
Tata Economic Consultancy Services  
206-208, Vikram Tower  
Rajendra Place  
New Delhi 110008, India  
Tel: 91-11-5723114/5739112  
FAX: 91-11-5724690  
  
Industrial Techno-Economic Services P. Ltd.  
7, Community Center  
East of Kailash  
New Delhi , India  
Tel: 91-11-6432335  
Tlx: 031-62554 AMKT IN  
  
COUNTRY COMMERCIAL BANKS  
  
State Bank of India  
Central Office  
Madame Cama Road  
Bombay 400021, India  
Phone: 91-22-202-2426  
Fax: 91-22-285-1391  
  
Bank of America  
DCM Building, 6th Floor  
16 Barakhamba Road  
New Delhi 110001, India  
Phone: 91-11-371-4756  
Fax: 91-371-5554  
  
Citibank, N.A.  
Jeevan Vihar Building  
3 Sansad Marg  
New Delhi 110001, India  
Phone: 91-11-374-7451  
Fax: 91-11-374-7450  
  
American Express Bank  
Maker Chambers IV, 7th Floor  
Nariman Point  
Bombay 400021, India  
Phone: 91-11-204-6884  
Fax: 91-11-204-6895  
  
THE MULTILATERAL DEVELOPMENT BANK OFFICE  
  
Ms. Brenda Ebeling   
Director  
The Multilateral Development   
Bank Office  
14th & Constitution, NW  
Washington, DC 20007  
Tel: 202-482-3399  
FAX: 202-482-5179  
  
U.S. DEPARTMENT OF AGRICULTURE   
  
U.S. Department of Agriculture  
Foreign Agricultural Service  
Trade Assistance and Promotion Office  
Tel: 202-720-7420  
  
  
APPENDIX F:   MARKET RESEARCH  
  
KEY PUBLICATIONS FROM FY95  
  
Mining Equipment & Technology  
Industrial Chemicals  
Aircraft & Parts  
Packaging for Food Processing Industry  
Computer Software Related Services  
Plastic Materials and Resins  
Electric Power Generation  
  
The following FAS reports are available in Fiscal Year 1995.  
  
Monthly Updates on Grains, Oilseeds, and Cotton  
  
Annual reports on Grains, Oilseeds, Cotton, Dairy Products, Livestock,  
Tobacco, Sugar, Coffee and Tea.  
  
Additional reports include: India's Agricultural Trade Barriers, The  
market for consumer food products, and the Annual Agricultural  
Situation.  
  
  
TENTATIVE ISA PLAN FOR FY96  
  
POST INDUSTRY SECTOR  
  
Madras Computer Education and Training  Services  
   Computer Peripherals  
   Fruit & Vegetable Processing Equipment  
   Cold Storage Chain  
   Satellite Equipment  
  
New Delhi Cable TV  
   Electronic Display Technologies  
   Broadcasting Equipment  
   Electronic Components for Telecom Sector  
   Printed Circuit Boards  
   Information Technology  
   Transport Infrastructure   
   Airport Modernization  
   Automotive Components  
   Advanced Machine Tools  
  
Bombay Financial Services  
   Paints & Specialized Coatings  
   Fertilizers  
   Biotechnology for Food Processing  
   Semiconductors  
   Advanced Analytical Instruments  
   Consulting Engineering Services for    Infrastructure Projects.  
   Hydrocarbons  
  
Calcutta Mining Subsector ISA  
   Iron & Steel industry subsector ISA  
  
  
APPENDIX G:   FY-96 EVENTS SCHEDULE AS OF JUNE 15, 1995  
  
DATES                 EVENT NAME                             CITIES  
  
10/05-08/95       U.S. Pavilion at LIFE 2000 (TFO)           Bombay  
10/05-08/95       U.S. Medical Equipment Catalog Show  
                  in LIFE 2000 (RC)                          Bombay  
Mid-October 95    Fourth issue of US&FCS India               New Delhi  
                  commercial newsletter "IND*USA"  
10/25-28/95       U.S. Pavilion at Broadcast, Cable          New Delhi  
                  and Satellite India 95 (BIO) (CTF)  
                  (U.S. Dept. of Commerce certified)  
10/28             U.S. Plastics Industry Trade Mission       Calcutta  
                                                             Madras  
                                                             Bombay  
11/04-07/95       Promote the MegaShow (Food & Dairy         Chicago IL  
                  Expo and IEFP),                            Chicago IL  
                  as a U.S.-India Commercial Alliance  
                  event (Lead-New Delhi) (FBP)  
December 1995     Santa Clara Trade Mission (TM)  
                  (Tentative)     
12/12-15/95       U.S. Pavilion at Avia India 95 (TFO)      Bangalore  
                  (Tentative)  
12/07-10/95       U.S. Pavilion at Communications           New Delhi  
                  India 95 (BIO) (CTF)  
                  (U.S. Dept. of Commerce certified)  
01/16-19/96       U.S. Pavilion or U.S. Mining Equip.  
                  Catalog Exhibit at the 4th Int'l  
                  Mining Machinery Exhib. (IMME 96)  
                  (TFO or RC)                                Calcutta  
01/18-23/96       US Pavilion at the 18th Asia Pacific  
                  Dental Congress & Exhibition (TFO)         Bombay  
  
End-January 1996  Fifth issue of US&FCS India                New Delhi  
                  commercial newsletter "IND*USA"  
02/07-13/96       U.S. Pavilion at Wisitex 96(TFO)           New Delhi  
02/07-10/96       U.S. Pavilion at Software India 96         Bombay  
                  (NASSCOM's annual conference and  
                  exhibition) (Tentative)  
02/07-15/96       U.S. Computer Software Trade Mission       Bombay  
                                                             Bangalore  
                                                             New Delhi  
                                                             Calcutta??  
02/17-27/96       U.S. Machine Tool/Manufacturing            New Delhi  
                  Technology Trade Mission (TM)              Bombay, ??  
                  (Tentative)  
February 1996     U.S. Food Processing and Packaging         New Delhi  
                  Machinery Exhibition (SFO)  
                  (Tentative)  
March 1996        U.S. Plastics/Paints Technical             Bombay  
                  Seminar Mission to India (SM)              New Delhi  
                  (Tentative)  
March 1996        Food Processing & Packaging Seminar        New Delhi  
                  Mission to India (SM) (Tentative)          Bombay, ??  
04/02-03/96       Products for Development USA               New Delhi  
                  Multi-State/Catalog Exhibition   
                  (Combined MSTD/RC)  
10/95-03/96       Ohio State Trade Mission to India        
                  led by Governor Voinovich (TM)  
                  (Tentative)  
10/95-03/96       New York State Trade Mission to India  
                  led by the Governor (TM)  
                  (Tentative)  
10/95-03/96       California State Trade Mission to India  
                  led by Lieutenant Governor Gray Davis (TM)   
                  (Tentative)  
10/95-03/96       New Jersey State Trade Mission to India (TM)  
                  (Tentative)  
10/95-03/96       Pennsylvania State Trade Mission to India  
                  (TM) (Tentative)  
10/95-03/96       Medical/Healthcare Trade Mission   
                  to India organized by   
                  Grand Rapids D.O. (TM) (Tentative)  
May 1996          U.S. Insurance Seminar Mission to            New Delhi  
                  India (SM) (Tentative)                       Bombay ??  
August 1996       U.S. Aerospace/Aviation Trade Mission        New Delhi  
                  to India (TM) (Tentative)                    Bangalore  
                                                               Bombay  
August 1996       U.S. Water Treatment Technical   
                  SeminarNew Delhi Mission to India   
                  (SM) (Tentative)   Bombay, ??  
September 1996    Electronics USA 96 (SFO) (Tentative)         Bangalore  
  
This report was completed in July 1995
```

To the top of this page