The document summarizes key opportunities and challenges for doing business in India over the next decade. It notes that India will require $1.7 trillion in infrastructure investments in the coming years. Major sectors of focus include power, transportation, ports, and telecommunications. India also has a growing middle class of 300 million people and is becoming a manufacturing hub for South Asia due to its skilled workforce and large domestic market. However, doing business in India presents challenges such as corruption, bureaucracy, and cultural differences that require due diligence. The document provides an overview of the legal and tax environment in India and recommendations for structuring foreign investments.

2. Central ohio business development Mission to india

18. Photos Courtesy of James Schimmer, Director, Franklin County Economic Development & Planning Department

19. GAME CHANGERS INDIA’S SECOND DECADE OF THE 21ST CENTURY Kegler Brown, Columbus, Ohio – March 2011

20. Afghanistan POK China Pakistan Nepal Bhutan Bangladesh India Myanmar

21. 26/11 Terrorist Attack on Mumbai

22. $1.7 Trillion in Infrastructure Required Over Next 5 Years 20,000 Km of road projects 150,000 MW of new power plants Upgrade of 25 existing airports A new air force Greenfield development of 25 new airports A deep water navy 12 new port/container projects 20,000 MW of nuclear power

23. The Next North SeaKrishna-Godavari Gas Discovery Largest Refinery in the World Jamnagar

24. The Next North SeaKrishna-Godavari Gas Discovery

25. Organized Retail Enters IndiaUnshackling India’s Farm-to-Market Supply Chain

32. 300 Million Middle Class

33. Manufacturing Hub of South AsiaSkilled Manpower and a Massive Domestic Market

34. Special Economic Zones (SEZs)

36. Can India Sustain its Competitive Edge ? PHARMACEUTICALS #1 in Generic Pharmaceuticals IPR Protections will need strengthening if India is to become the Innovation Nation of the 21st Century

37. TELECOM 10 million new cell phone users each month! But can transparency issues be overcome as new spectrum is allocated?

41. Common Values: Ainst Terrorism, Trafficking, Narcotics

42. Ideological Partner re: Nepal, Sri Lanka, Bangladesh, China

43. Common Law Judicial System

44. 2nd largest number of Doctors, Engineers, PhDs in the world

45. 100,000 Students to U.S. Each Year

46. 1.8 mil Americans of Indian Origin

47. Politically significant; Politically integrated

48. 54% of Indian Population is under the Age of 25Indo-U.S. Relations will Shape the Destiny of the 21st Century

49. History in the Making Kegler Brown, Columbus, Ohio – March 2011

50. Legal Intelligence andPractical Advice – India Presented by Vinita Bahri-Mehra, Esq.March 10, 2011

51. India-US: “Pas-Pas” A “Star-Bucks” in Goa, India

52. India-US: “Pas-Pas” Self-Service

53. India-US: “Pas-Pas” You’re safe here, pal!

54. India-US: “Pas-Pas” Just do it.

55. India’s FDI Regime 100% foreign investment permitted in most sectors on automatic basis except: Banking (74%). Telecom services (74%). Civil Aviation (49%). Insurance (49%). Retail trading – Single Brand up to 51% with prior approval. Certain sectors where FDI is prohibited: Atomic Energy. Lottery business. Gambling and Betting. Certain sectors where there are minimum capitalization requirements: Non-banking financial services activity (certain activities – fee based and fund based). Real estate construction and development projects.

56. Entry Strategies For US Investors: As an Indian Company A U.S. company can commence operations in India by incorporating a company under the Indian Companies Act, 1956, through: (1) Joint Ventures; or (2) Wholly-Owned Subsidiaries. Acquisition of shares/business assets of an existing Indian company. Consider RBI’s pricing restrictions.

57. As an Indian Company “Private Limited Company” is the most preferred option. Subject to fewer regulatory compliances. Charter documents can be made adaptable to shareholders’ requirements. However, restrictions on transfer of shares and borrowings.

58. As a Foreign Company U.S. companies can set up their operations in India through: (1) Liaison/Representative Office (2) Project Office (3) Branch Office Each can undertake only specified activities. Some other variants: (1) Build-Operate-Transfer (BOT) (2) Third-Party Outsourcing (BPO or KPOs) Franchising/Distributions/Agency Unincorporated Joint Ventures – “Association of Persons”

59. Are non-compete and non-solicitation clauses applicable? Contract Enforcement? What is the tax incidence on profits and gains and whether any tax breaks are provided by government? Are repatriation of investments and profits allowed? Are there any Labor issues to consider? What should be done to protect one’s IP? What law should govern the contract and which courts should have jurisdiction to adjudicate on disputes? What mechanism of dispute resolution is preferable? Key Legal Issues For Doing Business In India

60. A. Non-compete/Non-solicitation Every agreement by which anyone is restrained from exercising a lawful profession, trade or business is void. (Section 27 of the Indian Contract Act, 1872). Non-compete and non-solicitation are such restrictive covenants. Exception: Restrictive covenants that reasonably protect a party’s proprietary or commercial interest post-acquisition of a business with goodwill.

61. Exception: A partial restriction, reasonable in terms of time, geography or other limitations. Indian Courts tend to enforce a restrictive covenant operating “during term of employment” and not those “after the term of employment”. Non-compete/Non-solicitation, cont.

62. B. Contract Enforcement Legal Jurisdiction: Drafting Choice of Law and Forum provisions is crucial. Remedies: It’s advisable to negotiate and provide for a liquidated damages and/or penalty clauses in contracts as a safeguard. Damages is the primary remedy for breach of contract.

63. Contract Enforcement, cont. Performance Guarantees and Bonding Contract performance guarantee: Depending on the nature of the contract, your Indian customer/counterpart may request some kind of guarantee to ensure performance obligations. Different Forms: These guarantees can be of different forms – usually referred to as bonds. Can include – standby irrevocable LOC, Bank guarantee, and contract surety bonds. Clear Obligations: If a performance bond is provided, important to ensure that contract clearly states the performance obligations as well as note the specific conditions under which the bond can be enforced.

64. Contract Enforcement, cont. Practical Tips Negotiations: Contracts negotiations can be expected to go more slowly in India – particularly if dealing with the Indian bureaucracy. Different approaches to communication: Indian parties may not disagree with you directly about contractual issues. Instead they may suggest that matter can be discussed at another time or find some way to avoid an outright negative response. Flexibility: It is recommended that US Co., build considerable flexibility into their approach so that prices and other contract conditions can be adjusted.

65. C.Taxation in India Dividends declared can be repatriated freely through an authorized Indian bank. Dividends are tax-free in the hands of shareholders. A distribution tax of 16 % is payable by company. Corporate tax rate for foreign companies is 41.2%. For domestic companies, 30.99%. Withholding tax on royalties/technical fees/interest income. Domestic tax law – 10%. Indo-US DTAA – 10% for right to use of any industrial, commercial or scientific equipment. – 20% in any other case.

66. The tax rate provision of domestic law could be utilized as it is less than DTAA. Service tax rate is 10.3%. Computed on the “Gross Amount” charged by the service provider. Sales tax rate (CST & VAT). Varies from state to state, depending upon classification of goods. Varies from 0% to 12.5%. Tax incentives are available during a limited time for 100% Export-Oriented Unit, under Software Technology Park Scheme and Special Economic Zones Units, etc. Taxation in India, cont.

67. Important Taxation Issues India’s tax code has elaborate Transfer Pricing Regulations. Introduced in 2000/ 2001 for regulating prices at which the international transactions between two related enterprises are undertaken. Applicable only to international transactions wherein at least one party is a non-resident of India unlike UK and US where transfer pricing is applicable even to domestic transactions. Onerous documentation requirements prescribed under Rule 10D of the Transfer Pricing Rules. All entities having an aggregate value of international transactions in a financial year exceeding INR 15 crs (i.e. approx. US $3.3 mn) subject to compulsory transfer pricing scrutiny by the Indian tax authorities.

68. Important Taxation Issues, cont. The following methods prescribed for benchmarking international transactions: Comparable Uncontrolled Price Method (“CUP”) Cost Plus Method (“CPM”) Resale Price Method (“RPM”) Profit Split Method (“PSM”) Transactional Net Margin Method (“TNMM”)

69. Important Taxation Issues, cont. Avoidance of Permanent Establishment (“PE”)status is critical. PE Concept: A US company’s business profits that are deemed to accrue in India could be subject to Indian taxes, if such business, in part or whole, is carried through a PE in India. If the US company is liable to Indian taxes by virtue of having a PE, the extent of taxation would be confined to profits that can be attributed to such a PE.

70. Important Taxation Issues Circumstances that could include a PE are broadly classified under the following heads: Basic Rule: Activities done through a fixed place of business. Construction Rule: Performance of construction/installation/assembly activities or supervisory activities in connection with such activities for more than 120 days in any twelve month period. Service Rule: Where a foreign enterprise through its employees or other personnel renders services in India for a period of 90 days or more. Agency Rule: A dependent agent of a foreign enterprise through whom the business of the enterprise in whole or in part, is carried out in India.

71. D. Employment Issues Employment Agreement – Advisable to have a detailed document (not a one pager!), read in conjunction with the existing employment policies of the Company. Compliance required of both Federal and State laws. Important to identify locational advantages; Indian States have restrictions and relaxations.

72. “Without cause” termination for “Workmen” may become subject to: “Last come, first go”; Some level of compensation based on years of service; Sufficient notice to employee; and, Employer issuing a release certificate. However, consider the following while issuing release: Is there a possibility of breach of confidentiality? Is there a possibility of a breach of a non-compete covenant? Otherwise “At-Will”employment is recognized. Employment Issues, cont.

73. E. Intellectual Property Enforcement India is a member of the WIPO; signatory to major harmonization conventions and member of WTO. Remedies for IP violation: Civil remedies (injunctions, damages, or accounts) as well as criminal penalties. However, criminal prosecution is available on in trademark and copyright cases, not in ones involving patents or designs. Provisional Measures: Injunctions and ex-parte search warrants and seizes orders, known as “Anton Piller”orders, are available through the Indian Courts to stop infringements and to contain damages. Fast-track System (specialized forums): Intellectual Property Appellate Board – Appeals on IP prosecution (patents).

74. Intellectual Property Enforcement Minimize IP Risks “Airtight” Contractual provisions: Explicit obligations to ensure that the “receiving” party will protect “disclosing” party’s IP. Business practices: From the beginning, have a method in place to ensure controlled use of IP rights by the local associates. Define IP violation clause. Conduct Regular IP Audit.

75. Indian IP Laws do not provide for automatic assignments. Golden Rule: Advisable to have a covenant to assign IP in contracts and to obtain Deed of Assignment where required. Intellectual Property Rights.

76. Intellectual Property Rights, cont. Specific IP issues and related law: Patent and Design: Inventor/Author is owner. Formal assignment is necessary. Term: 20 years from date of filing. Registration of “Product Patents” allowed. Copyright: IP work is made in course of author’s employment under contract of service, employer is the first owner of copyright therein. Subtle difference from the U.S. concept of “works for hire”. Term: 60 years from date of publication. Possible Dispute: Work made in course of the author’s employment as against work made outside the course of employment. Therefore, emphasis is on “scope of employment”.

77. Trademarks and Service Marks: Trademark protection extends to shape of goods, packaging and combination of colors. Statutory infringement and common law remedy of passing off is available. Trade Secrets: No specific Indian legislation for statutory protection of trade secrets or confidential information. However, Courts (several precedents) specifically enforce confidentiality agreements through mandatory injunctions. Intellectual Property Rights, cont.

78. Indian Courts follow customary Private International Law rules. Choice of law made by parties is acceptable. Parties may also choose which court will have jurisdiction. Subject to public policy, courts recognize and enforce foreign laws. It is possible to split contract, to allow different parts to be governed by different laws. Absent choice, courts determine proper law of contract. Law with the closest connection to transaction. G. Jurisdiction and Laws Governing Contract

79. Caveat: However, certain issues may be subject to a law different from one agreed upon by parties. For example: IP transfer, registration, protection in vendor territory, real estate, labor laws, bankruptcy, enforcement of foreign judgment/award. Jurisdiction and Laws Governing Contract, cont.

80. H. Dispute Resolution Litigation vs. Arbitration (i) Litigation-Enforcement of Foreign Judgment. Judgments from courts in “reciprocating territories” can be enforced directly by filing before an Indian Court an Execution Decree. The United Kingdom of Great Britain and Canada are noted as “reciprocating territories”. Presently, U.S.A. is not declared as a “reciprocating territory”.

81. Dispute Resolution, cont. Judgments from “non-reciprocating territories”, such as the U.S.A, can be enforced only by filing a law suit in an Indian Court for a Judgment based on the Foreign Judgment. The foreign judgment is considered only as evidence. Such a law suit is to be brought within 3 years of foreign judgment. Likely a long and slow procedure as the Indian Courts are overburdened.

82. Dispute Resolution, cont. (ii) Arbitration-Enforcement of Foreign Arbitral Award. India is a party to the New York Convention, 1958. U.S. arbitral awards on commercial disputes are directly enforceable in India through foreign award being made a Decree of the court. Indian Courts may grant preliminary injunctions and other protective orders pending international commercial arbitration. An arbitration clause can avoid the time consuming and sometimes ineffective process of seeking damages through the civil courts in India.

83. There are some internal barriers that might provide obstacles in doing business or establishing business in India. It is necessary to be cognizant about them in order to be well prepared. For example: Corruption. Poverty. Infrastructure mess. Understanding the changes in real estate. Surfacing of stringent Corporate Governance. Bureaucracy. Negotiating style differences. Practical Advice: Identify the Obstacles

84. Things to Ponder Analyze your long-term objectives and accordingly decide on Entry Strategies and related tax structuring. Analyze and identify the region/state most appropriate for your business needs. Do Business in India…the Indian Way: ‘Think Global, Act Local’ The Indianized Chinese Kellogg's – no to cold cereals? KFC – Tandoori Chicken preferred to the ‘KFC experience’ McDonalds – ‘McVeggie Burger’ & ‘McAloo Tikki’ Domino’s – ‘Pepper Paneer’ & ‘Chicken Chettinad’ Pizza Hut/Pizza Express – spicing it up Due Diligence is the Key Knowledge of Indian business and legal environment leads to steady growth.

85. Legal Advice This presentation is designed to provide an overview of a number of legal principles and considerations. As each legal issue is fact dependent, this presentation should not be used or viewed as legal advice, and your legal counsel should be consulted on the application of your particular factual situation to the current law. Copyright: 2010 Kegler, Brown, Hill & Ritter

86. Thank You Vinita Bahri-Mehra, Esq. Kegler, Brown, Hill & Ritter Co., L.P.A. 65 E. State Street, Suite 1800 Columbus, Ohio 43215, USA Direct Dial: 1 614 225 5508 Fax: 1 614 464 2634 Email: vmehra@keglerbrown.com Web Address: www.keglerbrown.com

87. N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A March 2011 Anil Bhalla Vice Chairman, Investment Banking anil.bhalla@jpmorgan.com T: 212 622 4605 S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L

88. English_General This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party.This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan.Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change.J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only.In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us.In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity.J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction.Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan's policies on data privacy can be found at http://www.jpmorgan.com/pages/privacy. J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation.J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan plc, J.P. Morgan Securities Ltd. and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in EMEA and Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, N.A.J.P. Morgan deal team members may be employees of any of the foregoing entities. This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A

89. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

91. India is the world’s largest democracy

92. World’s twelfth largest economy at market exchange rates

93. Fourth largest economy in the world on purchasing power basis after USA, China and Japan

94. Strong legal system with a fair and independent judiciary. Largely based on English law

95. Well developed capital markets — Bombay Stock Exchange is Asia’s oldest stock exchange

96. Strong domestic consumption with a personal disposable income growth CAGR of 13.8% (2009-14E)

97. Important cities in India:

98. Mumbai (Key commercial center / financial capital)

99. New Delhi ( Political capital)

100. Bangalore, Hyderabad, Chennai, Pune and Calcutta (other important cities)

101. These cities account for over 80% of business establishments in India

102. There are over 3,000 MNCs operating in India including a number of small companies in the IT/BPO space

103. Indian banking sector was not affected during the recent credit crisis and has emerged much stronger and efficient than beforeI N D I A – E C O N O M I C P R O F I L E 1

104. Huge growth potential with opportunities across sectors A young population Savings & capital formation Rising per capita income (US$) (Median Age–2010) (as % of GDP) I N D I A – E C O N O M I C P R O F I L E Source: CSO, UN 2

106. Stable and institutionalized democratic political system

107. Established administration, commercial, legal, accounting & banking systems

108. Third largest English speaking manpower base in the world

109. R&D base for over one hundred Fortune 500 companies

110. Vibrant capital market with more than 5,000 listed CompaniesV-Shaped recovery 8% 6.1% …but exports have become increasingly important Domestic demand remains the key driver for GDP growth I N D I A – E C O N O M I C P R O F I L E GDP (US$bn) The vast majority of manufacturing output is now exported Domestic demand % GDP Source: Global Insight, IMF Source: RBI 3

111. Tracing the Growth– 1500 to 2050 I N D I A – E C O N O M I C P R O F I L E Source: Angus Maddison (OCDE) 4

112. % of India’s imports in 2009-10 % of India’s exports in 2009-10 India’s trade has grown 16% annually since 2005 Current trade flows EU 18% EU 15% US 11% UAE 7% China & HK 12% UAE 13% US 6% China & HK 10% Singapore 4% Singapore 2% I N D I A – E C O N O M I C P R O F I L E India trade volumes (US$ bn) 5

113. Services and Industrial Production constitute a dominant share of the GDP GDP by industry–Services driven economy Industrial production growth I N D I A – E C O N O M I C P R O F I L E Index sa, Sep 2008 =100 Index sa, Sep 2008 =100 Source: Global Insight, IMF 6

114. Other key financial metrics Forex reserves are very healthy FDI flows have been very robust FDI Inflow ($Bn) Forex Reserves ($Bn) Source: Department of Industrial Policy & Promotion, India Govt India’s debt remains relatively low I N D I A – E C O N O M I C P R O F I L E Total external debt to foreign exchange reserves (%) Total external debt as of Dec-10 (US$bn) Source: Ministry of Finance, Government of India and Reserve Bank of India, Moody’s Statistical Handbook * India’s external debt is as of Mar-09, Mar-10 and Mar-11E 7

115. Fiscal Deficit - an area of concern The government seems committed to tackling India’s Achilles heel Central Government Fiscal Deficit % of GDP I N D I A – E C O N O M I C P R O F I L E Refers to fiscal year; forecasts for 2012 and 2013 are as per the 13th finance commission which the government has pledged to implement 8

117. Opening up more sectors for investments

118. Public- Private partnerships

119. Infrastructure a key area

120. Boost to regional trade

121. Opening up of Insurance and telecom sectors further

122. Rapid growth in key infrastructure sectors through private sector participation

123. Privatization of large state owned enterprises

124. FDI caps raised for the key sectors

125. Opening of most sectors to majority foreign holding, except defense and railways

126. De-licensing of industry and foreign trade

127. Foreign investment limits raised in key sectors

128. De-regulation of the petroleum sector

129. Opening up of the insurance sector to domestic and foreign competition9

131. Investment in infrastructure required to sustain India’s economic progress

132. Major government focus in Energy and Transportation

133. Investment in infrastructure growing due to:

134. Increased political commitment

135. Linking of economic benefits from infrastructure

136. Encouraging private sector participation

137. Private sector actively involved in telecommunications, commercial and industrial investments

138. Significant opportunity for U.S. companies

139. U.S. is one of India’s largest trading partners

140. Bilateral merchandise trade greater than $40bn

141. However hurdles remain...Future infrastructure investment I N D I A – E C O N O M I C P R O F I L E Projected spending from FY07-FY12 Expect US$500bn+ in selected infrastructure segments Source: PwC–“Infrastructure in India” Source: 11th 5 year Plan–Indian Government and PwC 10

142. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

143. India – A Glass Half Full ? Positives Challenges Strong democratic institutions Demographic profile Sustainable reforms agenda High growth rates Balanced economy – domestic consumption and exports High domestic savings Large manufacturing as well as R&D base Well regulated banking sector Fiscal deficit High inflation Weak infrastructure Slow pace of reforms Legal system & labor laws need more focus Complex regulations Improvement in education system I N D I A – A G L A S S H A L F F U L L ? 11

144. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

146. With the liberalization of the foreign investment restrictions, the emphasis is now shifting to accelerating investments by reducing bureaucratic hurdles and regulatory uncertainties

148. Highways, ports, new airports & harbours

149. Townships, residential, construction & SEZs/ Industrial Parks

150. Hotels & tourism, roads

151. Technology

152. Petroleum & natural gas

153. Metals & mining

155. Telecom

156. Airlines

157. Insurance

159. Retail trading (multi-brand)

160. Agriculture

161. Atomic energy

162. Gambling & betting

163. Lottery businessPetroleum & natural gas 2% Telecom 8% Metallurgical inds. 3% Housing/Real estate 8% Automobile 4% Construction activities 7% Power 4% Total = US$113bn Source: Reserve Bank of India Notes: Figures for FY10 includes data till Jan-10 12

164. Health Care IT/ITES Retail Media Infrastructure Auto Financial Services Telecom Opportunities for Business O P P O R T U N I T I E S F O R F O R E I G N C O M P A N I E S I N I N D I A 13

166. Project Office: Foreign companies planning specific projects can set up temporary project/site offices. No RBI approval required. Cannot undertake or carry on any activity which is not related to the execution of the project

167. Branch Office: Foreign companies engaged in trading or manufacturing can setup branch offices post obtaining RBI approval. Scope of activities are defined by RBI in its approval

168. Joint Venture or technical/trademark license: Foreign company with an Indian joint venture requires a no objection certificate from such Indian company and FIPB approval

169. Purchase of Shares or Direct Investment in Local Company: Approval required from Foreign Investment Promotion Board excluding sectors permitted to proceed via Automatic Approval Route

170. Wholly Owned Subsidiary (WOS): i.e. private limited company. FIPB approval needed

172. Foreign Currency – INR not convertible on Capital Account but fully convertible on Current Account14

173. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

175. Credit- Reliance on intercompany for Capex (ECB) and local borrowings for working capital – combination of Short term loans , overdrafts and FX lines.

176. Identify exact requirements before borrowing – export loans and import buyers credit are available in foreign currency with pricing pegged to libor – hence , works out cheaper than local INR borrowing. Overall blended cost can be reduced substantially.

177. Surplus funds : there is no interest on current account, however, banks are permitted to offer short terms deposits starting from 7 days.

178. Other alternatives for parking short term funds- liquid funds/ treasury funds investing in AAA rated securities.

179. USD balances cannot be placed as depositsB E S T P R A C T I C E S F O R F O R E I G N C O M P A N I E S D O I N G B U S I N E S S I N I N D I A 15

181. No notional pooling/ netting off

182. Usually, companies open an INR account and a Foreign currency – EEFC account for export proceeds

183. Park funds in EEFC and convert as and when required

184. Use the INR account for effecting local payments- vendor, tax, payroll, others

185. Huge shift towards electronic – high and low value platforms

186. Visibility and control through internet banking platforms

187. Use of ERP/ other systems to integrate with JPM Access and use for reconciliation/ generation of payments

188. FX exposures- most companies are using simple forward contracts to hedge their exposures

189. Identify banks with electronic capabilities and a comprehensive product/ servicesB E S T P R A C T I C E S F O R F O R E I G N C O M P A N I E S D O I N G B U S I N E S S I N I N D I A 16

191. Short term loans: Can be availed for various tenors up to 1 year (eg. 1 week, 3 months, 9 months etc)

192. Overdrafts: Dynamic funding account to meet temporary cash flow mismatches

193. INR term loans

195. Refers to commercial loans in specified forms availed from non-resident lenders, including parent company

196. Forms of ECB: Bank loans, buyers’ credit, suppliers’ credit and securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares)

197. Minimum average maturity of 3 years for amounts upto US$20mm and 5 years for amounts above US$20mm and up to US$500mm

198. Subject to Reserve Bank of India (RBI) guidelines & restrictions on aspects such as end use, amount ($500mm per year) and tenor

199. ECB proceeds can be used for

200. Investment in certain sectors, overseas direct investment in Joint Ventures (JV)/ Wholly Owned Subsidiaries and is also permitted for first stage acquisition of shares in the disinvestment process and also in the mandatory second stage offer to the public

201. Use of ECB proceeds not permitted for on-lending, investment in capital market or acquisition of a domestic company, working capital, general corporate purpose and repayment of existing Rupee loans. Also cannot be used for real estate sector and issue of guarantees / SBLCs

202. Short Term Loans, Overdraft products and Term Funding

204. Pre & Post Shipment Export Financing: Up to 364 days

205. Negotiation & Discounting of Export LC Bills

206. Letters of Credit / Bank Guarantees

207. Receivables Purchase: Both with and without recourse to the seller

208. Domestic Supply Chain Financing

209. Structured trade financeTrade finance (both local & foreign currency) 17

210. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

211. India’s Financial Framework PLAYERS 40 Foreign banks (295 Branches) SEBI 30 Private Banks (~ 9,000 branches) Banks 27 Public Sector Banks (> 58k branches) Ministry of Finance 196 Regional Rural Banks (> 15k branches) I N D I A ’ S F I N A N C I A L F R A M E W O R K Financial institutions RBI Non-bank financial companies (> 7000) Source: rbi.org.in, www.banknetindia.com/finance/fi.htm 18

213. 4,900+listed companies–Equity market cap of over US$1,200bn

214. 1,698 FIIs & 4,800+sub-accounts

215. Quantum of FDI permitted varies by sector; Sectors such as technology & power generation allow 100% FDI while real estate & agriculture prohibit FDI – Net FDI in 2009-10 was US$19.7bn (US$17.5bn in 08-09)

216. Over 55,000 bank branches of total 70,000 branches support electronic clearing

218. High value, urgent electronic clearing (within 2 hours)

219. National Electronic Funds Transfer (NEFT)

220. Low value electronic clearing

221. MICR

222. Paper-based clearing

223. Evolution of payments landscape

225. Corporate bond markets under developed and low volumes. Appetite only for AA rated and above paper

227. Capital account convertibility not in the short term agenda

229. Regulator/Supervisor: Prescribes parameters of banking operations

231. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

233. Payment can be made under the automatic route

237. Not really relevant from an MNC perspective

238. Buyback of share capital

239. Buyback cannot exceed 25% of company’s paid up capital

240. Reduction of share capital

242. FDI is approved by the Government of India (GoI) under 2 routes

243. Automatic route

244. No specific approval from the Foreign Investment Promotion Board (*“FIPB”) is required provided the foreign investment is within the prescribed limits specified for each sector. Liberal policy except in sectors affecting national security or local population

245. 100% in infrastructure sectors, 74% in banking & telecom, 49% in airlines and 26% for insurance & print media. Prohibited sectors include real estate, retail, agriculture, atomic energy, gambling & betting and lottery business

246. Government approval route

247. Where specific FIPB approval is required, an application needs to be made to the FIPB

248. FIPB approval takes about 4-6 weeks

249. Foreign currency borrowings through the ECB (external commercial borrowings) route is a regulated form of foreign currency borrowing for Indian companies and refers to commercial loans in specified forms availed from non-resident lenders

251. LCY investments: Several options from deposits to capital market instruments

252. FCY surpluses cannot be invested onshore

253. LCY deposits, money market funds, high yielding derivatives structure

254. Foreign Currency Risk Management

256. Regulation of interest rates on deposits

257. Restrictions on Current Accounts held with banks

258. No interest on Current Accounts

259. Minimum seven day tenor for sweeps/deposits

260. Foreign Currency - INR not convertible on Capital Account but fully convertible on Current Account¹ Explained in detail in later slide; LCY = Local currency, FCY = foreign currency 20

262. Off shore long term loan–Allowed with regulatory approval

263. Advance against future receivables–Allowed from parent to the sub in India

264. Local INR/FCY funding–backed by parent guarantee , SBLC, standalone–allowed

265. Overdraft line, bill discounting, onshore trade loans–allowed on short term basis

266. Dividends/royalty/capital gains can be repatriated subject to payment of local taxes

267. Share buyback

268. Investment in JV/wholly owned subsidiary

269. Investment in rated paper of the parent of listed Indian subsidiary

270. Equity: Based on Foreign Investment Promotion Board approval. Need to be converted to INR

271. Debt or External Commercial Borrowings: Regulated

273. Money market mutual funds

274. Onshore inter - company loans (Tax implications)

275. Other investment options (CPs, T-bills)

276. Bank Accounts–Only Onshore INR non interest bearing accounts allowed. Resident Indian Companies having export proceeds can open Onshore Foreign Currency Accounts

277. Foreign Currency–INR not convertible on Capital Account but fully convertible on Current Account21

278. India – Economic Profile 1 India – A Glass Half Full? 11 Opportunities for Foreign Companies in India 12 Best Practices for Foreign Companies doing Business in India 15 India’s Financial Framework 18 N A V I G A T I N G Y O U R W A Y T O B U S I N E S S S U C C E S S I N I N D I A Basic Regulations in India 20 J.P.Morgan in India 22

281. Navigating Your Way to Business Success in India OSU Initiatives Chris Carey Director – Global Gateways 110

282. 111 Global Gateways Agenda OSU Global Strategy OSU Strategy for India Challenges Questions and Answers

283. 112 Global Gateways

284. Global Gateways Global Gateways To enhance the university’s teaching, research, and service. Facilitation for faculty research/teaching and international partnerships Portal for study abroad and international internships Alumni Affairs Academic programming and executive education/training for institutional partners both corporate and government International student recruitment and distribution of OSU information Partnerships with Ohio-based companies and International corporations looking to establish operations in Ohio 113

285. Locations Countries where OSU already has significant collaborations through Study Abroad Programs, Faculty Teaching and Research, University Partnerships, Alumni, International Students, Business Interests Implementation Gateways offices consist of leased space in two phases starting with China, India and Brazil 114 Global Gateways Global Gateways

286. 115 Global Gateways Global Gateways

287. Phase II Istanbul Eastern Europe Sub-Saharan Africa London 116 Global Gateways Global Gateways

288. Global Gateways Global Gateway - India Representative student contingent Great number of faculty connections Need in India for higher education Strong connections and partnerships with prestigious Indian Universities Growing world power and hub for innovation Support Ohio region’s development Underdeveloped education abroad potential 117

289. International Students – Country of Origin 118 Global Gateways India 800+ Students >12% of Total <2% of Study Abroad

290. Will locate in Mumbai business district with aim to establish in 2011 Will serve greater central Ohio to promote region Will capitalize on OSU core strengths Engineering Food, Agriculture, and Environmental Sciences Health Sciences 119 Global Gateways Global Gateway - India

291. 120 Global Gateways Global Gateways: Challenges

292. Global Gateways Global Gateways: Challenges Governmental Regulations Establishment of appropriate legal entity Foreign Universities Bill Initial funding and revenue generation Focus on core OSU strengths and activities Sustaining long-term faculty, student, alumni, and friends commitment and engagement 121

293. Questions 122 Global Gateways

294. Ohio and India March 10, 2011

295. Global Markets Division

296. Ohio – India Office Opened in 2008 in New Delhi Satellite offices in Mumbai, Bangalore, Hyderabad and Chennai Managing Director - Mr. Prem Behl

297. Ohio exports by country 2010 Canada 17.2 billion Mexico 3.5 billion China 2.3 billion France 1.9 billion Brazil 1.3 billion Japan 1.3 billion UK 1.2 billion Germany 1.1 billion 9. Australia 841 million 10. South Korea 640 million 11. Italy 610 million 12. India 570 million 13. Netherlands 542 million 14. Belgium 521 million 15. Singapore 461 million 16. Hong Kong 407 million

298. Ohio Exports to India 2010 Total all commodities 570 million Industrial Machinery/Computers 252 million Electric Machinery 49 million Optic / Photo/ Medical Equip. 41 million Plastics 36 million Aircraft/Spacecraft 29 million Pearls, Precious Metals, Stones 24 million Misc. Chemical Products 17 million Articles of Iron and Steel 14 million Iron and Steel 13 million Tanning and Dye 8 million

301. Ohio-India Relationship RECENT PROJECTS Unofficial list of over 140 Ohio companies with operations or major known exports to India (PG, Babcock Wilcox / Eaton / Battelle, etc.) Have assisted well over 30 companies with major export projects to India since office’s inception Several high-profile, in-going investment prospects from India – many in the advanced and renewable energy sectors High profile investment win for Ohio in March 2008 from Tata Consultancy Services – North American Delivery Center in Milford, OH – 200,000+ sq. feet, plans to house over 1,000 locally hired SW engineers. Ohio Business Mission to India in May 2011.

302. Indian Automotive Delegation to ColumbusApril 2010

303. Ohio Companies with Offices in India The Timken Company, Canton --- Produces highly engineered anti-friction bearings; alloy steel; related products --- 17,000 employees --- Operations in 26 countries --- technology center on Bangalore, India

304. Ohio Companies with Offices in India Proctor & Gamble, Cincinnati ---largest consumer packaged goods company in the world --- offices in 80+ countries --- 135,000 employees --- general office in Mumbai, India; also a manufacturing plant

305. Contact Information Alex Kohls Global Trade Development Manager Global Markets Division Tel: 614-466-0262 Alex.Kohls@development.ohio.gov