Doing Business in India

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• Doing Business in India
• Prem Behl
• Managing Director
• OHIO INDIA OFFICE

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Index

• India An Overview
• Opportunity Sectors
• Market Entry Strategies
• Exhibitions India Group

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Map of India
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Growing Indian Economy
ProjectedSource Economic Times India Brand
Equity Foundation (IBEF)
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Growing GDP
Contribution of Services - increased from 48
to 62 and is estimated to contribute 60 by 2010
ProjectedSource India Brand Equity
Foundation (IBEF)
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Growing Exports
Projected Source Ministry of Commerce IBEF
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Growing Imports
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Increasing Forex Reserves
Steadily increasing Forex reserves offer adequate
security against any possible currency crisis or
monetary instability
Source Reserve Bank of India India Brand
Equity Foundation (IBEF)
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Growing FDI Inflows
India is ranked second in AT Kearneys FDI
confidence index (2007)
Electronic equipment, manufacturing and telecom
have witnessed significant FDI inflow

• Provisional
• Source Department of Commerce

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Increasing Per Capita Income
Source India Brand Equity Foundation (IBEF)
Economic Survey 2007-08
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Vibrant Economy Driving MA Activities
In 2007, there were 676 MA deals and 405
private equity deals with a total value of USD
70 billion
Source IBEF
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Major MA and Investments Announcements in India
POSCO to invest in building steel manufacturing
plants and facilities in India by 2016
USD 12 billion
Plans to establish three manufacturing plants to
produce photo-voltaic units
USD 2 billion
Plans to spend on its development operations in
India over the next four years
USD 1.7 billion
Source India Brand Equity Foundation (IBEF)
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Major MA and Investments Announcements in India
Source India Brand Equity Foundation (IBEF)
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India Inc. Investing Overseas

• India Inc spent USD 32.73 billion for its 240
  overseas MA deals in 2007.
• Outbound FDI by Indian companies is set to
  increase by 15 per annum over the next five
  years.
• It is estimated that FDI outflows in 2007-08 are
  likely to overtake FDI inflows into India
• Reasons
• acquire new markets and maintain its growth
  momentum
• buy cutting-edge technology
• develop new product mixes
• improve operating margins and efficiencies
• take worldwide competition head-on

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India Inc. Investing Overseas
Main sectors Main Destinations China,
UAE, UKNorth America is emerging as a
destination.
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Major MA Deals Undertaken Abroad by India Inc.
Source India Brand Equity Foundation (IBEF)
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Additional economic indicators

• India has a consumer base of 1.14 billion people
• India is the 4th largest economy in the world
  when measured by PPP
• Indias has a growing middle class of over 300
  million people - 30 of Indias population and
  larger than the population of the US
• India is the 3rd largest global telecom market.
  The mobile subscriber base has grown from 0.3
  Million in 1996 to over 250 million currently.
• India is likely to add over 200 shopping malls by
  2010 and 715 malls by 2015
• The number of billionaires in the country were 3
  in 1999 23 in 2006 and are 48 currently.

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2. Opportunity Sectors for Ohio companies
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Indias Trade with USA
USD Billion
Imports from US
Source Department of Commerce, Govt of India
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Major Items Exported to USA (2006)
Source US Department of Commerce
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Ohios top manufactured exports to India (2006)
Source ODOD, State of Ohio
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Major Items Imported from USA (2006)
Source US Department of Commerce
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Aerospace and Nuclear

• Main Items imported from USA
• Helicopters, Aeroplanes, Spacecraft (Incl
  Satellites) Spacecraft Launch Vehicles, Nuclear
  Reactors, Boilers, Machinery And Mechanical
  Appliances Parts Thereof.
• Aircraft Engines - GE Aircraft Engines, Pratt and
  Whitney
• Aircraft Boeing, Lockheed-Martin
• Helicopters - Bell Helicopters
• Sikorsky Aircraft Corporation (SAC) plans to set
  up in India

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Precious Stones Metals

• Main items imported from USA
• Gold (Incl Gold Plated with platinum) unwrought
  or in Semi Manufactured Forms/In Powder Form
• Diamonds (not mounted)
• Articles of Jewellery parts

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Optical Medical Instruments

• Major items imports from USA
• Instruments Appliances used in Medical,
  Surgcial, Elctro-Medical Apparatus
  Sight-Testing Instruments
• Instruments Apparatus for Physical/Chemical
  Analysis
• Measuring/Checking Instruments, appliances
  machines, N.E.S. Profile Projectors
• Measuring Alpha, Beta, Gama, X-Ray
• Radiotherapy Apparatus
• Orthopedic appliances, artificial parts of the
  body, implants, etc.
• Lab Equipment Heating / Cooling

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Engineering Goods Machinery

• Major items imports from USA
• Electrical parts for Line telephony/telegraphy,
  including telephone sets, handsets, videophone
• Turbo-Jets, Turbo-Propeller other Gas Turbine
• Pumps
• Liquid Elevators
• Ball or Roller Bearings
• Other Moving, grinding, leveling, scraping,
  excavating, extracting, boring machinery
• Cranks Gears Ball Screws
• Switch Relays
• Transformers

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Automotive Sector - Overview

• India is the worlds
• 2nd largest two-wheeler market,
• 4th largest commercial vehicle market
• 11th largest passenger car market.
• Expected to be the 7th largest automobile market
  by 2016
• India has become an attractive destination for
  global American, European, Japanese and Korean
  OEMs.
• Over 50 new cars and models were launched in
  2007-08. Over 60 new cars and models are expected
  to be launched in 2008-09.
• General Motors India, a wholly owned GMC
  subsidiary reported 114 increase in domestic
  sales in August 2007 (5,817 units vs. 2,720 units
  in the same month last year).
• Indian companies are aggressively looking at
  North America, Europe and Asia to spread their
  wings and become global players in this sector.

Source IBEF, Economic Times
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Automotive Sector - Opportunities

• Export to India
• India imported US 3.3 billion worth auto
  components in 2006-07 - mainly wheel rims, ball
  bearings, gears and gearing components
• Bosch Chassis Systems will be making parts for
  Tata Motors Nano car
• Harley Davidson is expected to enter the Indian
  market.
• Leading India automobile manufacturers are
  investing overseas
• Mahindra and Mahindra (MM) will set up a
  assembly plant in North Brazil
• TVS Motor Company has set up a two-wheeler
  manufacturing plant in Indonesia
• Tata Motors acquired a Nissan facility in
  Pretoria, S. Africa
• Mergers/Acquisitions/JVs with Indian auto
  companies DaimlerChrysler AG of Germany has
  taken a call option to buy 26 per cent in
  Jalandhar-based bus body builder Sutlej Motors.
• Set-up manufacturing in India Audi, Fiat, Ford,
  Honda, Hyundai, Suzuki Motor Corp, Yamaha, etc.
  have manufacturing plants in India. Others like
  Piaggio, SkodaAuto, Volkswagen, are planning to
  set-up facilities in India.

Source IBEF, Economic Times
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Advanced Energy - Overview

• Hydro Energy
• India has been generating hydro-power for more
  than a century and ranks 5th in the world in
  terms of exploitable hydro potential.
• According to CEA estimates, Indias exploitable
  hydroelectric potential is estimated to be 150GW,
  whereas the installed capacity in the country has
  so far been 34.65GW.
• The potential of Indian small hydro power
  projects (up to 25 MW) is estimated at 15GW,
  whereas the country has so far set up SHP
  projects with a cumulative installed capacity of
  1.98GW only.
• Solar Energy
• Most parts of India have 300 - 330 sunny days in
  a year
• About 66 MW of aggregate capacity is installed
  for various applications comprising 1 million
  industrial PV systems
• India has attained 7th place worldwide in Solar
  Photovoltaic (PV) Cell production and 9th place
  in Solar Thermal Systems

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Advanced Energy - Overview

• Tidal Energy
• An estimated combined potential of 15GW has been
  identified at the Gulf of Kutch and the Gulf of
  Cambay on the west coast and Durgaduani creek in
  the state of West Bengal on the east coast.
• Wind Energy
• India's wind energy sector is estimated to have a
  potential of over 45GW
• India ranks 4th worldwide in use of wind power
  with an installed capacity of 7.09GW. Capacity
  addition of 10.5GW is anticipated.
• India is 3rd in the world in new construction
  corresponding to an overall increase of over 40
  in new wind power stations.
• Bio Energy
• Indian climatic conditions offer an ideal
  environment for biomass production.
• The Agriculture Ministry has large scale plans to
  plant Jatropha across the country. India
  currently has nearly 250,000 acres under Jatropha
  cultivation.
• The Indian Railways had a successful trial run
  with a 20 mix of Jatropha fuel with diesel.

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Advanced Energy - Opportunities
Export to IndiaKhandelwal Solar Power Ltd has
signed an MoU with Shanghai-based Solar EnerTech
Corp to import and market the latter's products
in India. Technology Collaborations American
Superconductor Corporation licensed its
proprietary wind turbine design and manufacturing
know-how exclusively to Ghodawat Industries
(India) Pvt. Ltd. for certain countries in the
Middle East, South Asia and Africa.
JV/Investments/Acquisitions Tata BP Solar, a
joint venture between Tata Power Company and BP
Solar has manufacturing plants in India, and
regularly exports it products and systems. Essar
Power is exploring JV options to manufacture wind
turbines. Set up manufacturing in India
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Advanced Energy - Opportunities

• Indian companies overseas Wind power major
  Suzlon Energy Ltd. recently acquired German wind
  turbine manufacturer RE Power for Euro 1.35
  billion. Suzlon Energy (Tianjin) Ltd., a
  wholly-owned subsidiary, has orders for wind farm
  projects in China.
• Exports from India
• The export of wind turbines and components
  together is expected to be US 500 million during
  this financial year.
• During 2006-07 (up to 30 September 2006),
  indigenously produced wind turbines valued at
  250 million were exported to Australia, Brazil,
  China, USA and to European countries.

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IT / ITeS - Overview

• The rapidly-growing Indian IT sectors revenues
  are estimated to touch US 49-50 billion in FY 08
  with a growth _at_ of 24-27.
• Indian information technology enabled services
  (ITeS), which provided basic data entry services
  over a decade ago, now offer services such as
• Knowledge Process Outsourcing (KPO)
• Legal Process Outsourcing (LPO)
• Games Process Outsourcing (GPO)
• Design Outsourcing
• In 2006-07
• Software and services exports grew by 33 to a
  revenue of 31.4 billion.
• The Indian domestic IT segment grew 23 to 8.2
  billion. The BPO segment touched 9.5 billion,
  and is estimated to reach 12.5 billion in FY
  2008.
• Further, the industry expects the export turnover
  to touch 80 billion by 2011.

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IT / ITeS - Opportunities

• Indian companies are investing overseas
• Responding to the falling dollar, companies such
  as Infosys, Satyam, Tata Consultancy and Wipro
  have stepped up acquisitions and opening
  additional facilities closer to US and European
  clients.
• Wipro has opened a facility in Monterrey, Mexican
  to service American and European clients.
• Satyam has launched a software centre in MSC
  Malaysia, a government-designated high-tech zone.
  
• ExlService Holdings, Inc. are to open BPOs in
  Croatia, Philippines and Romania.
• Satyam is looking to buy small boutique BPO and
  knowledge process outsourcing (KPO) firms in Asia
  Pacific, Europe and US with deal sizes between
  40- 50 million.

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Biotechnology - Overview

• Indian biotech accounts for 2 of the global
  biotech market.
• With over 340 companies, growth has been 35-40
  pa for last 3 years.
• Has already attracted as many as 200
  multinationals.
• Ranks 1st in terms of growth in the transgenic
  crops sector.
• Is already the world's largest vaccine producer
  as well as the largest cultivator of BT cotton.
• The Indian bioinformatics market is poised to
  double by 2010.
• The biotech industry in India comprises five
  broad divisions
• Biopharma
• Agri-biotech
• Bioinformatics
• Bioindustrial
• Bioservices

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Biotechnology - Overview
Biotech Parks in India  Andhra Pradesh
Development and scale-up of bioprocesses and
technologies. Himachal Pradesh Medicinal and
aromatic plants, horticulture. Karnataka Drugs
and pharmaceuticals. Maharashtra Pharmaceutical
and bio-medical research Punjab Agribusiness
and certification of export goods. Chennai RD
in Medical Biotechnology, Nutraceuticals,
Agricultural Biotechnology and Bioinformatics
Lucknow Health care, agriculture, environment,
industrial applications, energy.
Indian Bio Clusters
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Biotechnology - Opportunities

• Export to India
• The Indian biotechnology reagent market is
  primarily import-oriented.
• Technology imports are growing in India.
• Invest in Indias Biotech Success Story
• 100 foreign equity investment is allowed in
  manufacturing of all drugs except recombinant DNA
  products and cell targeted therapies.
• DBT provides a single window processing mechanism
  for all mega biotechnology projects involving
  foreign direct investment (FDI) of 22 million or
  more under the Foreign Investment Implementation
  Authority (FIIA) with its Fast Track Committee
  (FTC).

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Biotechnology - Opportunities

• Mergers, Acquisitions and tie-ups
• Indian firms do research for pharmaceutical
  giants like AstraZeneca, Merck and Pfizer, while
  other partnerships involve Indian firms acquiring
  the intellectual property of small American
  companies.
• Outbound
• Biocon has taken 70 stake in German pharma
  player AxiCorp enabling it to market injectible
  insulin, generics, biosimilars and biologics in
  the region.
• Biocon acquired the intellectual property assets
  of US-based Nobex Corp., entered into
  co-development with Bentley Pharma and is
  currently looking to acquire a US pharma
  distributor.
• Nicholas Piramel acquired UK's Avecia Biopharma.
• ITC acquired Australian agri-biotech company
  Technico.
• Inbound
• Merrieux Alliance picked up a 60 stake in
  Hyderabad based Shantha Biotechnics.

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Polymer / Plastics - Overview

• Growing electronics, packaging, healthcare,
  consumer durables and telecommunication sectors
  of Indian economy offer growth for plastics
  consumption.
• The consumption of plastics is expected to reach
  12.5 MMT, making India the third largest consumer
  of plastics by 2010 from the current 8th rank.
• In 2007, the Polyolefin segment grew by about
  20.
• Polymer demand dominated by polythene
  polypropylene.
• The Indian plastics processing industry is highly
  fragmented and small and tiny players constitute
  majority of the units.
• Injection moulders dominate the plastics
  processing sector.
• Polyethylene bag and sheet producers dominate the
  extrusion segment.

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Polymer / Plastics - Opportunities

• Export to India
• Import duty on polymers and plastics products is
  one of the worlds lowest.
• Equipment for special end-product such as BOPP
  film, heat shrinkable film and rigid PVC foam are
  imported from countries like China, Germany and
  Italy.
• JVs/Ownership
• International equipment suppliers have entered
  India either by joint venture or through 100
  ownership. Some technology tie ups are also
  found.
• Some of the prominent suppliers present in India
  include   ASB Nissei  Battenfeld
   Brampton  Cincinnati Milacron  Frankische
  Rohrwerke  Krah  Reifenhauser   Sidel  
  Windmoller Holscher

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Polymer / Plastics - Opportunities

• Mergers, Acquisitions and tie-ups
• Outbound
• Sintex has acquired Frances Nief Plastic, a
  leader in plastic injection mouldings and
  thermosets, Chennai-based Bright Brothers and
  US-based Wausaukee Composites (WCI) over the last
  year.
• Uflex Ltd is likely to set-up a new plastic film
  line in Dubai through a wholly-owned unit.
• Inbound
• Alpla Group, an Austrian plastic packaging
  company, is set to form JV
• Mitsui Chemicals Group is investing 7.5 million
  to set up a new unit in India
• DSM plans to invest over 100 million by 2010

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Market Entry Strategies

• US companies can enter the Indian market via the
  following routes
• Appoint an agent
• Open Project Office / Branch Office
• 100 wholly owned locally incorporated company
• JV with Indian partner
• Franchise agreement
• Technology transfer

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Marketing Strategies

• Research Find more information about the
  industry and competitors
• Liaise with relevant government departments
• Liaise with relevant multipliers / trade
  associations and chambers of commerce
• Attend conferences and meetings
• Exhibit at important trade shows to generate
  contacts
• Participate in Trade Missions coming to India
• Plan company visits
• Organise / Attend roadshows
• Advertise in local media and PR activities
• Price Appropriately Good quality at affordable
  price market
• Customer Service is an important factor
• Database membership directories of various
  chambers of commerce and trade associations are
  good database
• Liaise with Ohio India Office

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Export to India

• Import Regime
• India imports most goods on the payment of a
  specified custom duty. The basic customs tariff
  rate ranges from 0 to 40 plus additional duty of
  2.
• Classification - The Indian classification on
  tariff items follows the Harmonized Commodity
  Description and Coding System (Harmonized System
  or HS).
• A small number of goods fall in the
  prohibited/restricted list of items which are on
  grounds of national security, health and
  environmental protection.
• Anti - dumping measures are taken by India
• Keep abreast of the latest duty changes imposed
  by Central Board of Customs Excise within the
  Ministry of Finances Department of Revenue

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Import Regime
Export to India

• Imports generally fall into one of the following
  three categories
• Freely importable items - Most capital goods
  fall into this category. Items in this category
  do not require import licenses and may be freely
  imported by any individual or entity.
• Canalised items - Items under this category can
  be imported only by specified public-sector
  agencies.
• Prohibited items Majorly relate to import of
  Ivory, animals and products related to wild
  animals.
• Import approval is based on compliance with
  procedures

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Import Regime
Export to India

• Imports are allowed free of duty for export
  production under a duty exemption scheme.
• Export Promotion Capital Goods (EPCG) Scheme
  allows manufacturer exporters to import capital
  goods for pre production, production and post
  production (including CKD/SKD thereof as well as
  computer software systems) at 5 Customs duty
  subject to fulfillment of specified export
  obligations.
• Agent can assist in providing detailed and
  customised information on applicable schemes,
  duties and various formalities

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Distribution

• Infrastructure is being improved Golden
  Quadrilateral, privatization of road
  construction, Railway East-West Freight corridor
• Inter-state tariffs are applicable
• Appoint local wholesaler or distributor for
  distribution in India

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Product Certifications, Labeling Standards

• Bureau of Indian Standards (BIS) operates Product
  Certification Scheme
• The Certification Scheme is basically voluntary
  in nature but for a number of items affecting
  health and safety has been made Mandatory. These
  are LPG cylinders, food colours, food additives,
  pressure stoves, safety items used in mines,
  clinical thermometers, packaged drinking water,
  etc.
• BIS operates two schemes for certification of
  imported goods, one for foreign manufacturers and
  the other for Indian importers.

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Language and Numerics

• India has 22 recognised languages
• English is used commonly for business
• Exchange rate US1 Rs. 40
• Grams, meters, liters are used for measurements

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20 years of Promoting Trade
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A Profile

• Established 1987
• Total Employees 130

• Area Sold (Dom/Intl) 300,000 nett sq.
  ft. (Apr07 Mar08)

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• Headquarters
• New Delhi
• Branch Offices
• Mumbai
• Bangalore
• Hyderabad
• Chennai
• Menlo Park, CA, USA
• Rep Office
• Ahmedabad

Delhi
Ahmedabad
Mumbai
Hyderabad
Chennai
Bangalore
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Business Strengths

• Understand Indian and international business
  culture,
• with in-depth market knowledge,
• have robust database,
• with extensive business contacts,
• media contacts,
• and relationships with Central and State
  Governments.

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Exhibitions India Group Committed to Excellence
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• Indias leading ISO 90012000 certified trade
  show organiser
• Our Mission
• To organize a complete range of knowledge based
  international trade fairs and conferences.
• To provide associated services to help our
  customers create
• Joint ventures technology transfers
• Promote bilateral trade
• Increase investments

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Our Events in 2008 - 09

• All About Food (6 8 August 2008)
• Renewable Energy India (21 23 August 2008)
• Elcomp India (10 -12 September 2008)
• Sports, Fitness, Adventure Leisure (13 16
  October 2008)
• Convergence India (18 20 March 2009)
• Airport Airline Expo (Civil Aviation Week) (3
  5 August 2009)

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• Facilitate participation of Indian companies at
  overseas trade shows.
• Sales agent for over 180 exhibitions, focusing on
  37 industries in 48 countries.
• Market leader in this field.

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• A unique print resource for the used car segment
  targeting car buyers.
• The Ultimate Car Marketplace

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• Provide design and display solutions for
  exhibitions, retail showrooms, events, etc.
• Focus on quality and innovation.

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• Group Hospitality wing serving clients.
• Arrange hotel reservations, domestic and
  international ticketing, tours / sightseeing,
  etc. services.

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• Represent
• State of Ohio, United States of America (USA)
• Hong Kong Trade Development Council (HKTDC)
• City of Stuttgart, Germany

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Main Activities

• organise overseas trade missions
• prepare research reports
• facilitate media coverage

• promote trade ties
• organise seminars road shows
• undertake business matching
• co-ordinate visit schedule / appts.

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Thank You Prem Behl Managing Director OHIO INDIA
OFFICE premb_at_eigroup.in