FTS DOC ITA

Moderator: Linda Abbruzzese

July 10, 2008

8:30 am CT

Coordinator: Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. To ask a question, that is star 1 on your touch-tone phone. Today’s conference is being recorded. If you do have any objections, you may disconnect at this time. Now I would like to turn today’s meeting over to Ms. Linda Abbruzzese. Ma’am, you may begin.

Linda Abbruzzese: Thank you. Good morning for those of you joining on the East and West coasts. Thank you for joining us for a Webinar on the India business opportunities in the medical, chemical and machinery sectors. I’m pleased to note that we have more than 20 people registered for this Webinar today.

I am Linda Abbruzzese, International Trade Specialist for the Marketing and Communications Office for the U.S. Commercial Service at the Department of Commerce.

This Webinar is being brought to you in cooperation by the U.S. and Farm Commercial Service and I would like to welcome all participants in the export community for joining us from all over the U.S.A. to learn about these medical, chemical and machinery industries.

In a moment I’ll turn the presentation over to Aileen Nandi, Principal Commercial Officer for the U.S. Consulate General in Kolkata, India. She will be the main speaker of today’s Webinar.

Joining her will be (Shimoti Modiri), Commercial Specialist at the CS New Delhi and (Swami Remarchristnan), Commercial Service of CS (Denai). Aileen, (Shimoti) and (Swami) will be available at the end of the presentation to answer your questions.

Contact information will also be provided. For those of you who just joined us, you can still log onto the Webinar by entering the URL Web site and pass code per instructions that were sent to you by e-mail. We do have some housekeeping details to make sure everyone gets the most benefit from this morning’s Webinar.

You will be able to hear the presentation via your telephone and view it simultaneously via your computer. If you are not hooked-up to both, please take a moment to do this.

If you are experiencing any technical difficulties, please press star 0 anytime during the presentation. Because of the large number of participants that we will have today, it is not logistically feasible to take voice questions.

However, we do invite you to type-in your questions on your screen as they occur to you during the presentation. There is a box at the bottom of your screen on the right-hand side where you can click and type-in your questions at anytime during the presentation.

We will compile your questions and present them as time allows for the presentation. The questions which are not answered during the Webinar due to our time constraints will receive personal answers via e-mail after the Webinar.

In addition, all listeners will be provided with information for any individual follow-up counseling, expert assistance and market research. For those of you who just joined us and logged-in, you can still join in our Internet conference.

Now I’d like to introduce live online Aileen Nandi, Principal Commercial Officer for the U.S. Commercial Service in Kolkata, India. Aileen, thank you for joining us.

Aileen Nandi: Thank you Linda. Good morning everyone. I’d first like to welcome you to today’s Webinar and thank you very much for your participation. My name is Aileen Nandi and I’m the Principal Commercial Officer currently based in Kolkata, India. However, I’ll be moving to Chennai, South India, in a few weeks.

I’d first like to start off with a very basic overview of the commercial environment in India. I think most of you have probably heard the India success story.

The market right now is booming and it’s among the strongest growth markets in the world right now and we’re really seeing this as sustained growth where the growth rates have been 8 to 9% the past five years and that really shows no sign of slowing down.

However, India is a huge country. There’s a lot of, there are four distinct regions North, South, East and West and it can be very challenging to do business here.

However, we have an idea that the benefits greatly outweigh the challenges and we’re certainly here to help you identify opportunities and overcome any challenges that you might have.

Just to go through a couple of demographic details, of course, Indian population is the second largest in the world after China with over 1.2 billion people but what is really worth noting is that it’s a very young population and you see here that the median age is 25 and over 70% of the population is under 35.

And so this has a significant impact on the business opportunities in India, that the middle class is huge, it’s growing, it’s striving, and private consumption also is a very large part of the gross domestic product. As I said, this is a sustained growth. The momentum is certainly there and the picture of the market is very apt showing India blasting off.

Goldman Sachs for example estimates that India will soon become the third-largest global economy and as I mentioned before, the 8 to 9% growth rates that we’ve seen the past five or six years is soon to be the fastest growth in the world in three years.

This has very significant implications for our relationship with India, certainly in the business and trade environments where we really see a lot of action happening.

The next slide you see some, a graph and a picture really speaks a thousand words. You can see that the trade has just boomed from 2002 to 2007. Last year alone we went from our exports to India from $10.1 billion to $17.6 billion.

I should mention we sold a couple of airplanes which often impacts that but you can certainly see the trend for bilateral trade two-way is certainly very, very healthy and so we’re really encouraging U.S. companies to explore the India markets to tap into these opportunities.

In terms of investment, again you see a very healthy steady growth that shows no sign of slowing, both of U.S. investment to India and what we’re also seeing more and more and you probably see the same happening in the U.S. of major Indian companies investing in the United States.

So this is a very, very brief overview and as Linda mentioned, at the end I’ll be available along with my colleagues (Shimoti) and (Swami) to answer any questions that you might have. So jumping first to our first industry, the healthcare industry in India is really undergoing a rapid transformation.

There are many reasons for this, but I talked briefly about the demographic profile and the demographics in India are changing and the rise of lifestyle-related diseases that, you know, we of course contend with in the United States has really altered the behavior of the health-seeking customer.

What’s also significant is that many more people are covered by health plans and insurance so we’re talking about 12 million people which is very paltry if you consider that India has a population of 1.2 billion people, so this is also a huge growth rate here and healthcare insurance premium collections are expected to reach $3.8 billion by the year 2012.

What’s also interesting is that we’re seeing India really trying to market itself as a destination for healthcare because the costs here are significantly lower, and that’s interesting only because as you see on the slide that the infrastructure right now is very much inadequate and India needs a huge amount of investment to the tune of almost $80 billion to build the current medical infrastructure.

So right now, the demand for hospitals and beds far surpasses the availability and to meet that growing demand, over one million beds have to be added by the year 2012 and India, the hospitals are really trying to cope with the demand.

In terms of medical equipment, this is also a booming sector with a 15% growth rate and expected to be $3 billion by the year 2009. The new specialty and super-specialty hospitals depend on the import of high-end medical equipment, much of which can come from the United States and this accounts for over 65% of the entire market.

I look at some of the best prospects and I should mention that this is a good list but it’s by no means exhaustive, so if you’re in the medical sector and you don’t see one of your technologies or products here, just let us know and we can certainly let you know if there’s a market.

I should also mention there’s a lot of foreign competition. The Europeans are doing very well selling their medical equipment, they’re here and very aggressively, and what is also the case for machinery is that the after-sale for this is extremely important.

So when you look at the market, you have to look at your strategy of convincing the potential customer that you can have somebody on the ground fixing the equipment almost immediately because you can imagine if there’s a very high-end piece of equipment in a hospital that’s not working, that could have major implications for the hospital and the patients.

So a success story in this sector, we worked with a California-based company (Accidents) that manufactures high-quality laboratory consumable items. Basically my colleague (Shimoti) in Delhi provided a briefing to the local office and encouraged them to participate in our U.S. pavilion at a biotech show in New Delhi.

Furthermore, we worked at the company, gave them a number of leads in terms of potential clients in the healthcare and research laboratory sectors as well as academic institutions and so they as a result of our joint cooperation, they confirmed to us that they had a number of sales to the customers of the leads that we provided.

This is one of the booming sectors in India right now and again happy to answer any questions you have on that front. Jumping quickly to chemical, this is one of India’s oldest industries and as you can see it’s a very important constituent of the Indian economy with some 3% of India’s GDP.

The size of this sector is estimated to be around $35 billion and the total investment is about $60 billion and it employs about one million people so of course that’s very significant.

In terms of volume, the 12th-largest in the world and the 3rd-largest in Asia, but what’s really significant is that the Indian chemical industry has shifted from manufacturing very basic chemicals to being a high-end innovative industry.

So with major investments in R&D for example, India has registered significant growth in the areas of specialty chemicals, fine chemicals and pharmaceuticals.

In terms of the various segments, basic chemicals is about $20 billion. Specialty chemicals is about $9 billion and the high-end knowledge segment is about $6 billion.

Chemicals of course is an area that’s regulated and if you’re involved in this sector, we can provide you with the assistance that you need in terms of approvals or getting the information you need to export that to India.

Machinery is one area again where we’re seeing a huge boom because when you talk about 8 to 9% economic growth rates, they need the adequate infrastructure to sustain that and so the industrial growth that you see here is over 10% this year, again which is driving the demand for machinery.

The center for monitoring Indian economy has estimated that new projects worth almost $81 billion are scheduled for implementation this and next fiscal year, and again that’s supporting the demand for machinery.

The Indian automobile, auto parts, consumer durables, general engineering goods, railways, defense, aerospace, all these industries are red hot right now and they’re developing world-class products for both the Indian markets and for export and again these are hot areas for machinery.

The metalworking machinery and latest manufacturing technologies have enabled these Indian companies to maintain their manufacturing competitiveness.

And the slide this here some of the major end users of machinery, and again it’s very hard to scratch the surface in terms of where machinery can go because it’s basically across the spectrum.

One thing I should mention here is that Indian companies are very, very price-sensitive so we’ve seen in a couple of instances where U.S. companies can occasionally find it hard to compete across all sectors where certainly machinery where the local company realizes that the U.S. machine might be the most, you know, is the best in terms of quality, in terms of output, but due to cost, they prefer to go with another type of appliance.

So some from China and some from other countries, so one area that we’re also telling U.S. companies about is used and refurbished machines. So the success that we had in the machinery sector is with on a trade mission that we did in conjunction with the association for manufacturing technology, AMT, which did a trade mission back in November/December of 2007.

We worked with the company (Ingersoll-Siene) based in Michigan and that trade mission visited Mumbai, (Prunay), Bangalore and Chennai and part of what we do on trade missions is we organize matchmaking meetings, receptions, briefings.

And so as a result of meetings, the contacts that we hooked them up with, (Ingersoll-Siene) sold a (unintelligible) to a company called (Tariana) Thermal which is valued over $750,000 so this is just one of many successes we’ve had in this sector.

And basically we recommend that you have somebody on the ground identify an agent representative distributor, somebody on the ground who can help with the sales and marketing.

Ideally that person could also help as I mentioned the after-sale for this and having a local partner will make all the difference, especially in selling these types of high-cost goods.

Just a brief overview of the commercial service in India. We’re located in seven cities across the country and basically we work with U.S. companies to help them identify business opportunities and do whatever it takes to help the company make a sale.

So anything ranging from if you have a machine stuck in Customs, we can work with you to get that out. We help you identify agents, distributors, end users, buyers. We help to solve trade complaints. We do advocacy in the case of a public (unintelligible) and basically you tell us what you need and then we help you make the sale.

So one big project that we’re working on is a trade mission coming up in November which will have stocks in Delhi, Hyderabad and Mumbai. We’re working in conjunction with FedEx on this trade mission and we are working to help the small to medium-sized companies come to India for the first time.

Basically the perks that you get if you come on the trade mission is that we help vet your product, technology or service to determine whether a market is viable for you.

And so this is of course one should know to give you the justification that you might need to travel and take such a trip but then two, if there’s no market or local competition is really stiff.

Again I think that’s very good business intelligence to have in determining where you place your efforts and resources. As I mentioned with the previous example, we do, another prime benefit is we do the prearranged matchmaking so you tell us who you want to meet with, the types of companies, what kind of agreement you’re looking for and we go out and find those people.

And you get a list of the meetings beforehand so you can go into each meeting very prepared, know who you’re dealing with, you know their level of interest and background information so you can have a very substantive discussion.

And again we do networking events in each city as well as site visits to see different plants and different elements, to see India’s dynamic growth in action as well as providing in-depth briefings from different people in the embassy country team and the industry experts.

So I mentioned the staff are in three cities. Delhi of course is the capital city where all the government agencies are located so that’s where you see the policy development.

Almost all the major sectors and industries are located there as well as their respective chambers and associations so almost every trade mission that we see has a stop in New Delhi.

Hyderabad is one of the areas where India is really booming and you see India thriving down there and it has a very wide range of industries ranging from pharmaceuticals, cement, steel. You see them listed there.

Again, there’s a lot more going on in Hyderabad, a lot of IT as well, so you’ll see India booming. Then moving on to Mumbai which is the financial capital and this has the highest energy consumption and is heavily industrialized so like Delhi, Mumbai has a nice concentration of most sectors in industry.

So I flew through the presentation. I apologize if I went too fast. I wanted to leave time for question and answers. We’ll go, we’ll have a Q&A session now and then I left my contact information as well as my colleague (Greg Briscoe) based in (Lumphis) who’s helping to recruit and coordinate for this mission.

The two Web sites up at the top on FedEx and then on our Web site, you can get more information on the India market and the trade mission and so at this point I’ll just open it up for questions and we look forward to working with you all as I do explore the India market.

Coordinator: Thank you. If you would like to ask a question, please press star 1 on your touch-tone phone. One moment please for the first question.

Aileen Nandi: I see a question on the Web site, somebody typed in.

Linda Abbruzzese: Yes, this is Linda here. We’ll start with the first question that has been asked and written. It’s from (Diana Callahan). She would like to know, she knows that India has historically been a source for pharmaceutical companies and with the current growth in healthcare, she would like us to discuss with her the further opportunities for U.S. pharmaceutical companies to target India as a customer base.

Aileen Nandi: (Shimoti), can you answer that one, please?

(Shimoti Modiri): Can you repeat the question?

Linda Abbruzzese: Yeah, I’ll repeat the question. The question is India has historically been a source for pharmaceutical companies and with the current growth in healthcare, could you please discuss the further opportunities for U.S. pharmaceutical companies to target India as a customer base?

(Shimoti Modiri): Yeah, in the pharmaceuticals industry, there are several foreign companies which have a manufacturing base in India and there are, the Indian industry is also large. Some of them, I mean, India is a large exporter of pharmaceuticals also.

But with the patents coming into play in India with the WTO regulations there and alliance with the WTO regulations guarantee so we think there would be a lot of foreign companies also coming into, you know, actually export, U.S. companies to export into India.

And the healthcare scenario is changing. It’s more lifestyle diseases. There are lots of case of diabetes as well as cancer-related products would have a big market here.

New drugs because those are, the Indian companies are not large enough to do R&D currently so we find new drugs would again have a big market in India, but said this, another part is some of the drugs, lifesaving drugs, are under the price control of regime of the government. I could send you more details on this.

Linda Abbruzzese: Okay, great. Thanks (Shimoti). That is currently all the questions that we have written. If there’s anyone that has an oral question, please press star 1 and the operator will assist you. In the meantime, I just wanted to let everybody know that a copy of the Webinar as well as PowerPoint slides and a transcript will be uploaded on our Web site, the Commercial Service export.gov web site at www.export.gov and when you go into the site, you will see on the right-hand side a link that says view Webinars.

When you click on that link, you will be able to see all of our archived Webinars that we have been doing, not only on India but on also other markets in other international themes such as documentation requirements, embargoes and other, in sanctions, etc.

So just to let everyone know, please give us your questions and please look at that Web site for more information.

Aileen Nandi: Feel free to send me an e-mail if you’re not able to ask at the presentation. I can e-mail it to you, and also I wanted to mention that we have free market research in all these sectors and again, send me an e-mail, let me know the areas that you’re interested in pursuing.

I’ll put you in touch with the right person and we’ll make sure you get the market research and work with you to identify opportunities in India.

Coordinator: You do have a couple of questions via the phone lines. Our first one comes from (Karen Couric). Your line is open.

(Karen Couric): Yes, I think you might have answered the question. I just wanted to see if we would be able to get the slides after the presentation.

Linda Abbruzzese: Yes. As I mentioned before, we will have the PowerPoint slides in this presentation as well as video, the Webinar itself, and a transcript, and this will all be uploaded on our Web site, and our Web site is www.export.gov for government GOV and on the right-hand side you will see a link and the link will say view Webinars, v-i-e-w and then Webinars.

When you click on that link, you will see a list of all of our archived Webinars and this will also be included in that archive list.

(Karen Couric): All right. Thank you.

Coordinator: (Diane Callahan), your line is open.

(Diane Callahan): I’m wondering how many participants are you anticipating for the upcoming trade mission?

Aileen Nandi: That’s a good question. We’re trying to figure that out right now. We’re aiming for 50.

(Diane Callahan): Great. Thanks.

Linda Abbruzzese: I have a question here from (B. Biller) who has a question. It says do you have any market research on demand for packaging machinery?

Aileen Nandi: We sure do. In fact, last night I did a Webinar on packaging machinery so if you can send me an e-mail, I’d be happy to send you all the market research we have and work with you on that sector.

Linda Abbruzzese: Okay.

Coordinator: There are no further questions via the phones.

Linda Abbruzzese: Okay and I believe that’s all the questions that I show from the queue in our question-and-answer box. Well everyone, if there are no more questions, I will conclude by thanking our speaker Aileen Nandi for her expertise as well as the assistance of (Shimoti) and (Swami) for assisting not only in this Webinar but in also helping Aileen with this content.

Everyone, thank you very much. If there’s questions that you might have after this Webinar, please note the contact information so that you can contact any one of these speakers.

Also please remember to check-out the Web site at www.buyusa.gov/India for more information on India as well as www.export.gov/cs for information on the U.S. Commercial Service and other Webinar events.

I’d like to thank everybody for joining us and check your e-mail boxes for more information and upcoming Webinars. Thank you.

(Shimoti Modiri): Thank you. Good night.

Coordinator: This concludes today’s conference call and everyone may disconnect at this time.

END