INDIAN SCENARIO

INDIA GDP GROWTH RATE

The Gross Domestic Product (GDP) in India expanded at an annual rate of 8.90 percent in the
third quarter of 2010. From 2004 until 2010, India's average quarterly GDP Growth was
8.37 percent reaching an historical high of 10.10 percent in September of 2006 and a
record low of 5.50 percent in December of 2004. India's diverse economy encompasses
traditional village farming, modern agriculture, handicrafts, a wide range of modern
industries, and a multitude of services. Services are the major source of economic growth,
accounting for more than half of India's output with less than one third of its labor force.
The economy has posted an average growth rate of more than 7% in the decade since 1997,
reducing poverty by about 10 percentage points. This page includes: India GDP Growth
Rate chart, historical data and news.

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate

India 5.25% 8.90% 9.70% 8.00% -14 45.8550

Year Mar Jun Sep Dec

2010 8.60 8.90 8.90
2009 5.80 6.00 8.60 6.50
2008 8.50 7.80 7.50 6.10

INDIA GDP SURGES 8.9% IN THE THIRD QUARTER

Published: 12/2/2010 9:09:35 AM By: TradingEconomics.com, Reuters

India's domestically-powered economy grew more than expected in the September quarter,
defying weakness elsewhere and putting pressure on the Reserve Bank of India (RBI) to tighten
monetary policy although a rate increase next month still looks unlikely.

Annual gross domestic product grew 8.9 percent in the September quarter -- matching the revised
figure for the previous quarter.

Consumer price inflation eased to an annual 9.7 percent in October from 9.82 percent the
previous month, data showed on Tuesday. Wholesale price inflation, which is more closely
watched as it covers a higher number of products, eased to 8.58 percent in October from 8.62
percent a month earlier.

Investment growth slowed on an annualised basis to 11.1 percent from 19 percent in the previous
quarter, while annualised private consumption accelerated to 9.3 percent from 7.8 percent in the
previous quarter, pointing to inflationary risks.

The services sector, which accounts for over 50 percent of GDP, grew 9.8 percent in the
September quarter, higher than 9.3 percent in the previous quarter.

Signs of easing inflation, a fragile global economy and weaker industrial output in September
were likely to forestall any rise in rates in the near-term, some analysts said. "Unless the full year
growth looks likely to cross 9 percent, the central bank is unlikely to get aggressive again in
raising rates," said Anjali Varma, economist at MF Global in Mumbai.

Industrial output growth -- a key indicator of growth momentum -- in Asia's third-largest

economy slowed unexpectedly in September to 4.4 percent from a year earlier, down from the
previous month's upwardly revised 6.92 percent growth.

India marketing scenario

Currently in India, the national economy and marketplace are undergoing rapid changes and
transformation. A large number of reasons could be attributed to these changes. One of the
reasons in these changes in the Indian Market Scenario is Globalization, and the subsequent and
resulting explosive growth of global trade and the international competition.

The other reason for these changes in the Indian Market Scenario is the technological change.
This is an important factor because the technological competitiveness is making, not only the
Indian market, but also the global marketplace cutthroat.

In the Indian Marketing Scenario, the market success goes to those companies that are best
matched to the current environmental imperatives. Those companies that can deliver what the
people want and can delight the Indian customers are the market leaders.

Today the companies are operating in such a marketplace where survival of the fittest is the law.
In order to win, the companies are coming out with various new and evolving strategies because
the Indian market is also changing very fast. It is to capture the Indian market, that the Indian and
the Multi National Companies are using all of their resources.

The Indian market is no longer a sellers market. The winner is the one who provides value for
money. A large number of companies have huge idle capacities, as they have wrongly calculated
the market size and installed huge capacities. This has further contributed to converting the
Indian market into a buyers market.

The Indian Marketing Scenario is one of the biggest consumer markets and that is precisely the
reason why India has attracted several MNC’s. These large Multi National Companies have
realized that to succeed in the Indian market-place they need to hire Indian representative who
are much more aware of the Indian economic, political, legal and social realities. In the Indian
Marketing Scenario, it is the MADE FOR INDIA marketing strategies that work

Investment Scenario in India

Emerging strong even during the scariest phase of global financial meltdown, India has become
one of the favorite investment destinations for the foreign investors across the globe. The
investment scenario in India is getting better and better with each passing day due to high
confidence level of the investors. Today, India is considered the 4th biggest economy in the
world. Its impressive GDP rate, especially in the field of purchasing power, has catapulted it to
second position among all the developing nations.

According to forecasts, Indian economy will grow to become 60% in size of the economy of US.
It will also witness macro-level stability in economic conditions. Behind all this, investment can
be said to be the key player.

To know investment environment in India in the best possible way, it will be wise to consider the
performance of 3 core sectors including education, infrastructure and security.

PrivateEducationInvestment

Since Independence, Indian education scene has improved for the better. As against 0.1 Million
enrollment in 1947, India experienced over 11 Million enrollments in 2005-06. At present, the
educational sector has become more attractive with its growing enrollment rates and the credit
for this can be given to the whole fresh team of education providers, consisting of distance
learning course providers, private institutes, foreign education providers and public institutions.

Though the Foreign Direct Investment (FDI) in educational sector, comprising higher education,
has been allowed by the Indian government, there are still many shortfalls that need to be
overcome. An increase in the enrollment figures is being constantly witnessed. But, when it
comes to cumulative states expenditure, the scene is quite gloomy. For the period 2007-08, a fall
of about 18% has been seen in the total expenditure. Further, a clear gap in the per capita
education expenditure among the states can also be seen. Per capita fund inflow to educational
sector in Uttar Pradesh stood at Rs 483 whereas in Bihar it was Rs 487 in 2005-06. Himachal
Pradesh has Rs 1777 and Maharashtra and Kerala show Rs 1034 per capita fund flow.

Despite good financial performance of many of the states, their spending scenario in educational
sector has been found in poor condition.

Infrastructure Investment:

Investment scenario in India in infrastructure sector is attractive. Many sectors have been
allowed to receive private investment, which is truly a turning point. In past few years, many
road projects have been launched under National Highway Development Programme. The
project costing neared about US$ 12 billion. In this, the foreign construction companies have
also been invited to take part. Telecom sector and power reforms have also experienced massive
improvement. Telecom and Oil and Gas sector are seeing disinvestments processes. Government
is also thinking of introducing a more integrated transport system with chalking out plans for the
investment.

It cannot be denied that India has been successful in launching plenty of infrastructure projects
with encouraging private participation in the sector. The booming IT and BPO sectors of India
are the absolute testimony to its success story in the infrastructure projects.

The overall outlook of the roads and highways in India has also changed for the better. Many
cities and towns have been inter-connected to each other. Both state and central governments
have dished out significant amount to the development of highways.

Security Investment:

Security investment scenario in India is also bright. While several industries in India are
grappling with the impact of global meltdown and recent Mumbai attacks by terrorists, the one
industry which is predicted to register profits in near future is the Indian security industry. The
private security business in India is expected to become Rs 50,000 crore (Rs 500 billion) worth
industry.

Current Investment Scenario in India

Globalization and Foreign Direct Investment form an integral part of all the developed as well as
developing economies. In fact, the growth of the underdeveloped economies is also dependant on
these key factors. These components equip any nation with new skills, new items and provide
smooth access to markets and technology. Today, every nation across the globe is looking for
foreign and overseas investors. Whether it's India or China, everyone wants foreign investments.
According to recent trends, India is only second to China in the league of favorite investment
destinations.

In the report issued by Department of Industrial Policy and Promotion, the fund inflow to India
reached US$ 27.3 billion in the period 2008-09, considered from the month of April 2008 to the
month of March 2009. Last quarter of 2008-09 alone witnessed an inflow of approx. US$ 6.2
billion.

In the reports issued by Reserve Bank of India for outward investment from India, a growth of
29.6% to US$17.4 billion has been seen in the period 2007-08. The figures do not include
individuals and banks. India is considered the 2nd highest foreign employer in the United
Kingdom after the United States.

Global Investment Scenario

Along with India, the others who are participating in the race of investment among the
developing economies are China, Singapore, Malaysia, Russia and Brazil. Most of them are
vying for contracts from USA and Europe.

Healthcare
Last Updated: November 2010

Sector structure/Market size

The Indian healthcare sector is expected to become a US$ 280 billion industry by 2020 with
spending on health estimated to grow 14 per cent annually, according to a report by an industry
body. "Healthcare has emerged as one of the most progressive and largest service sectors in India
with an expected GDP spend of 8 per cent by 2012 from 5.5 per cent in 2009. It is believed to be
the next big thing after IT and predicted to become a US$ 280 billion industry by 2020," the
report said.

At present the sector is estimated to be around US$ 40 billion and will grow to US$ 78.6 billion
by 2012.

As per a study by an industry body and Ernst & Young, India would require another 1.75 million
beds by the end of 2025. The public sector however is likely to contribute only around 15-20 per
cent of the required US$ 86 billion investment. The corporate India is therefore, leveraging on
this business potential and various health care brands have started aggressive expansion in the
country. Some of the companies that plan to increase their footprints include Anil Ambani’s
Reliance Health, the Hindujas, Sahara Group, Emami, Apollo Tyres and the Panacea Group.

Sahara Group is planning several healthcare projects such as a 200-bed multi-specialty tertiary
care hospital at Gorakhpur in Uttar Pradesh, a 1,500-bed multi super-specialty, tertiary care
hospital at Aamby Valley City and 30-bed multi-speciality secondary care hospitals across all the
217 Sahara City Homes Townships.

Meanwhile, Artemis Health Sciences (AHS), a health care venture of the Apollo Tyres Group, is
also planning to establish four to eight multi-specialty hospitals in Punjab, Uttar Pradesh,
Madhya Pradesh, Rajasthan and Haryana over the next three years.

The rural healthcare sector is also on an upsurge. The Rural Health Survey Report 2009, released
by the Ministry of Health, stated that during the last five years rural health sector has been added
with around 15,000 health sub-centres and 28,000 nurses and midwives. The report further stated
that the number of primary health centres have increased by 84 per cent, taking the number to
20,107.

The size of the Indian medical technology industry may touch US$ 14 billion by 2020 from US$
2.7 billion in 2008 on account of strong economic growth, higher public spending and private
investments in healthcare, increased penetration of health insurance and emergence of new
models of healthcare delivery, according to a report ‘Medical Technology in India: Enhancing
Access to Healthcare through Innovation’ released by PwC and an industry body.

Health Insurance

The Indian health insurance market has emerged as a new and lucrative growth avenue for both
the existing players as well as the new entrants. According to a latest research report "Booming
Health Insurance in India" by research firm RNCOS released in April, 2010, the health insurance
market represents one the fastest growing and second largest non-life insurance segment in the
country. The Indian health insurance market has posted record growth in the last two fiscals
(2008-09 and 2009-10). Moreover, as per the report, the health insurance premium is expected to
grow at a CAGR of over 25 per cent for the period spanning from 2009-10 to 2013-14.

Healthcare
Last Updated: November 2010

Investments in Healthcare

As per data released by the Department of Industrial Policy and Promotion (DIPP), the drugs and
pharmaceuticals sector has attracted foreign direct investment (FDI) worth US$ 1.82 billion between April
2000 and September 2010, while hospitals and diagnostic centres have received FDI worth US$ 955.10
million in the same period.

• Care Institute of Medical Sciences (CIMS), a hospital venture brought forth by a group of doctors in
Ahmedabad, has come up with India’s first ‘green hospital’.
• Drug maker Lupin plans to invest an average US$ 100 million each in the coming years for capital
expansion and acquisition of foreign companies, according to Ramesh Swaminathan, President – Finance
and Planning, Lupin.
• The Apollo Hospitals Educational and Research Foundation (AHERF) has firmed up its stem cell
research collaboration with US-based StemCyte, investing US$ 15 million in the 50-50 venture.
• Apollo Hospitals also plans to invest US$ 650.04 million by 2014 to add 4,000 beds.
• New Delhi-based hospitals chain Fortis Healthcare plans to invest US$ 146.81 million over next 12-
18 months to add 2,100 new beds, said Bhavdeep Singh, Chief Executive Officer, Fortis on November 3,
2010.
• Nova Medical Centres, a specialised day care surgery centre chain, plans to invest nearly US$ 225.5
million for setting up 100 centers across the country by 2014, said Suresh Soni, Chairman, Nova Medical
Centres.
• Manipal Hospitals plans to invest US$ 45.23 million in the next three years to double its capacity to
8,000 beds, said Rajen Padukone, Chief Executive Officer, Manipal Hospitals.
• Wockhardt Hospitals plans to invest up to US$ 158.32 million to double its bed capacity to 2,000 by
2013, said Anil V Kamath, Managing Director, Wockhardt Hospitals Ltd.

Medical Tourism

According to a new report published by RNCOS, titled "Booming Medical Tourism in India" India’s share
in the global medical tourism industry will reach around 3 per cent by the end of 2013. The report states that
medical tourism is expected to generate revenue around US$ 3 billion by 2013, growing at a CAGR of
around 26 per cent during 2011–2013. The number of medical tourists is anticipated to grow at a CAGR of
over 19 per cent during the forecast period to reach 1.3 million by 2013.

The Indian medical tourism industry is presently at a nascent stage, but has an enormous potential for future
growth and development on the back of low cost range of treatments provided by the country. The growth in
India’s medical tourism market will be a boon for several associated industries, including hospital industry,
medical equipments industry and pharmaceutical industry.

Domestic medical tourism in the country has also seen growth in the recent years. As per the report
‘Domestic Tourism in India, 2008-09’ released by the National Sample Survey Office (NSSO), trips for
‘health and medical’ purposes formed 7 per cent of overnight trips in the rural population and about 3.5 per
cent in the urban population. ‘Health and medical’ purposes accounted for 17 per cent of same-day trips in
rural India and 8 per cent in urban India. Expenditure on medical trips accounted for 30 per cent of all
overnight trip expenditure for rural India and 15 per cent for urban.

Mobile Healthcare

Computer-based bio-surveillance projects generating data about diseases and creating databases on
healthcare in rural areas are becoming popular in India with various organisations entering into this arena.

• The Indian Institute of Chemical Technology (IICT) in Hyderabad has developed a model to forecast
possible epidemics of diseases such as malaria and encephalitis in rural Andhra Pradesh.
• A recent initiative by a global consortia consisting of the Indian Institute of Technology, Madras, the
National Centre for Biological Sciences, Carnegie Mellon University's Auton Lab, LIRNEasia, University
of Alberta, Respere Lanka, Lanka Jathika Sarvodhaya Society and the International Development Research
Centre (IDRC), called the Real Time Biosurveillance Program (RTBP), has attempted to use the power of
the mobile phone in developing a healthcare model.
• Narayana Hrudayalaya and the Mazumdar Shaw Cancer Centre tied up with SANA, a research
group at Harvard/MIT, to use smart phone-based detection of oral cancer and other diseases.

Government Initiative

The Government launched the National Rural Health Mission (NRHM) in 2005. It aims to provide quality
healthcare for all and increase the expenditure on healthcare from 0.9 per cent of GDP to 2-3 per cent of
GDP by 2012.

According to Union Budget 2010-11, the Finance Minister, Mr Pranab Mukherjee increased the plan
allocation for Ministry of Health and Family Welfare from US$ 4.2 billion in 2009-10 to US$ 4.8 billion in
2010-11.

Moreover, in order to meet revised cost of construction, in March 2010 the government allocated an
additional US$ 1.23 billion for six upcoming AIIMS-like institutes and upgradation of 13 existing
Government Medical Colleges.

The Union Cabinet on October 20, 2010 approved the proposal of the Ministry of Health & Family Welfare
to declare National Institute of Mental Health and Neuro Sciences (NIMHANS), Bangalore as an Institute of
National Importance on the lines of All India Institute of Medical Sciences, New Delhi, Post Graduate
Institute of Medical Education and Research, Chandigarh and Jawaharlal Institute of Postgraduate Medical
Education & Research, Puducherry.