India Market Overview
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India Market Overview


from the Department of Commerce

The Indian market, and its one billion plus population, presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment. In recent times, the declining value of the dollar, vis--vis competitors' currencies, is expanding and accelerating these opportunities. India's infrastructure, transportation, energy, environmental, health care, high-tech, and defense sector requirements for equipment and services will exceed tens of billions of dollars in the mid-term as the Indian economy globalizes and expands. India's GDP, currently growing at around 7 percent, makes it one of the fastest growing economies in the world. Construction of nearly everything from airports to container ports to teleports, is setting the stage to remake India.

Key Economic Indicators

  • GDP: $691 billion
  • Growth: Estimated 7-8 percent or higher in 2005-06; 7 percent in 2004-05
  • Breakdown:Services equal 50 percent of the GDP; industry and agriculture equal 50 percent
  • Ranking: 10th largest economy in the world in 2004, and fourth largest in purchasing-power parity terms
  • Per capita income: $603 in 2004-05, (almost double the figure of two decades ago). Of the 1.065 billion people, 39 percent live on less than $1 per day
  • Purchasing power: In 2005, approximately 170-200 million people had growing purchasing power, thus creating a growing middle-class consumer population
  • Youth Power: Over 58 percent of the Indian population is under the age of 20. That is over 564 million people, nearly twice the total population of the United States

U.S. - India Trade

  • Total Trade: Total bilateral trade in 2005 was $26.77 billion
  • U.S. Exports to India in 2005 increased to $7.96 billion, a 30.3 percent increase from the previous year
  • Imports from India in 2005 totaled $18.81 billion, a 20.8 percent increase from the previous year

Doing Business in India

The Indo-U.S. relationship is in the midst of a remarkable transformation. The two countries, politically and economically distant for much of the late twentieth century, now find their national interests converging at many points. Indian tariffs have been reduced progressively since the early 1990's. Tariffs and poor infrastructure present the biggest obstacles to foreign investment and growth, but India's infrastructure requirements also present trade and investment opportunities for American companies. Key factors to doing business successfully in India include: finding good partners who have knowledge of the local market and procedural issues; good planning; aggressive due diligence and follow up; and patience and commitment.

The U.S. Commercial Service in India offers customized solutions to help your business enter and succeed in the Indian market. Our India-wide network of trade specialists will work one-on-one with you through every step of the exporting process, helping you to:
  • Target the best markets
  • Promote your products and services to qualified buyers
  • Meet the best distributors and agents for your products and services
Visit our services available for U.S. companies for more information on doing business in India.

See your company listed for free on our website through our Featured U.S. Exporters program. Market Entry Strategy

  • Finding partners and agents. New business must address issues of sales channels, distribution and marketing practices, pricing and labeling and protection of intellectual property. Relationships and personal meetings with the potential agents are extremely important. Due diligence is strongly recommended.
  • Geographic diversity. U.S. companies, particularly small and medium-sized enterprises, should consider approaching India's market on a local level. Good localized information is a key to success in such a large and diverse country. U.S. Commercial Service posts in New Delhi, Mumbai, Chennai, Ahmedabad, Bangalore, Hyderabad and Calcutta provide indispensable local information and advice and are well plugged in with local business and economic leaders. Often multiple agents are required to serve each geographic market in the country.
  • Market entry options. Options include using a subsidiary relationship, a joint venture with an Indian partner, or using a liaison, project, or branch office.

Best Prospects

Ranked on the basis of estimated Indian imports from the U.S. for 2005, the best prospects for U.S. exports follow. The most promising investment opportunities exist in healthcare services, retailing and biotechnology. For more information on each of the best prospect sectors, go to Leading Sectors for U.S. Exports of the India Country Commercial Guide.
  • Airport & Ground Handling
  • Computer and peripherals
  • Education Services
  • Electrical Power Generation, Transmission & Distribution Equipment
  • Food Processing & Cold Storage Equipment
  • Machine Tools
  • Medical equipment
  • Mining & Mineral Processing Equipment
  • Oil & Gas Field Machinery
  • Pollution Control Equipment
  • Safety and security equipment
  • Telecommunication Equipment
  • Textile Machinery
  • Water

LEADING SECTORS FOR US EXPORTS AND INVESTMENTS

The following are the 14 best prospect sectors for India in terms of imports from U.S. ranked in alphabetical order for the year 2005.

INDUSTRY SECTOR

IMPORTS
(in U.S. $ million)

Airport & Ground Handling

60

Computers & Peripherals

900

Education Services

1,703

Electric power generation, transmission and distribution equipment

370

Food Processing & Cold Storage Equipment

39

Machine Tools

96

Medical Equipment

237

Mining & Mineral Processing Equipment

330

Oil & Gas Field Machinery

350

Pollution Control Equipment

508

Safety & Security Equipment

70

Telecom Equipment

550

Textile Machinery

50

Water

11

Upcoming Events

The U.S. Commercial in India has an active trade events program in India and in the U.S. Visit our trade events section for more information on upcoming events.

To Contact Us

U.S. Commercial Service
The American Center
24 Kasturba Gandhi Marg
New Delhi 110 001
India
Tel: (91-11) 2331 6841-48
Fax: (91-11) 2331 5172
Email: New.Delhi.Office.Box@N0SPAM.mail.doc.gov

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