Population is 1.21 billion (as of 2011 census) India is a republic, governed by a parliamentary system,

consisting of 28 states and 7 union territories India is the 7th largest and 2nd most populous country in the

world India has 18 official languages, with Hindi and English been

predominantly used throughout the country Currency is the Indian rupee Main industries: textiles, chemicals, food processing, steel,

mining, petroleum, machinery, pharmaceuticals and software Major economic Centers: Mumbai (Bombay), Chennai

(Madras), Hyderabad, Bangalore, Delhi, Kolkata One of the youngest countries in the world, average age 25 Each year 19 million students enroll in high school and 10

million in pre graduate degree course across India. 2.1 million Graduates and 0.3 million post graduates pass out of India’s non engineering colleges

The Indian economy is 10th by nominal GDP, and 3rd by purchasing power

India’s GDP grew by 9.7% 2010-11, 6.2% 2011-12 and 5% 2012-13 and is expected to grow by 5.7% in 2013-14 (RBI forecast)

There has been an average annual GDP growth rate of 5.8% over the past two decades

Over 100 of fortune 500 companies have R & D facilities in India

The Bombay stock Exchange lists 6600 companies, only NYSE has more

Labor force of 498.4 million Low cost labor Political Stability and

government policies

Sources: The World Bank, Indian Ministry of Finance Wikipedia,

Rates as the 2nd best destination for manufacturing projects and the most attractive investment destination (IBM)

3rd in UNCTAB report on world Investment prospects (2009)

Rated among most favorite Investment destinations (JETRO, JBIC, EIU, Deutsche Bank, etc)

Operates under English common law and based on English style justice system

Largest democracy in the world

2nd largest English speaking nation in the world after USA

Projected to be 3rd largest economy by 2050

Harmonized IP rights laws 2nd largest pool of

scientists and engineers in the world

Superb banking systems and well developed financial systems

Favorable business policies & political outlook

Route Description

Local Office Create a base in India with limited capabilities

Franchising Parent company allows franchisee to use companies strategies and trademarks

Joint Venture Partnership between host and home firms, in which home firm has an equity and management voice within the firm

Contract Manufacturing Product is produced in India by a local producer.

Licensing Give licensee in India patent and trademark rights, copyrights and know-how on products and process

Direct Export Uses agent, distributor, overseas subsidiary or act via government agency.

Indirect Export The products are exports though trading companies, export management companies.

Wholly Owned Subsidiaries

Buy a company already in India or build a new facility.

Advantages Direct contact with

customers Improved credibility

in market place with customers

Disadvantages Cost of establishing

an office is higher than using an agent and/ or distributor

Don’t have a local partner with contacts and expertise

Advantages Rapid international

expansion Group purchasing and

advertising arrangements

Relatively inexpensive way of expanding

High levels of consumer demand and relatively low levels of competition

Disadvantages Difficulty adapting

franchised chain to local market tastes

Limited revenue growth as only receive a percentage of profits

Advantages Decrease the capital risk

involved Leverage the local

companies facilities, in manufacturing, distribution and retailing

Leverage the local companies managerial capability in the local environment

Leverage the local company’s contacts with the government to get green signals

Disadvantages Complexity in coordinating

policies, decisions and execution with a different company.

Difference in culture Difference in managerial

styles Difference in the motivation

behind the participation Communication problems Selecting right partner Complications at time of exit Safety of intellectual

property

Advantages Low capital required Low managerial Risk Focus on core

activities Less Complicated exit

problems Less Complicated

division of responsibilities

Disadvantages Chance for a lack of

control on certain parameters

Differences in quality Standards, lead to negative initial experience for customers

Scalability of problems Selection of vendors

Advantages Import and investment

barriers Legal protection possible

in target environment Low sales potential in

target country Large cultural distance,

licensee lacks ability to become a competitor

Rapid entry into foreign market

Virtually no capital requirements

Returns realized faster

Disadvantages Control over use of assets

may be lost over manufacturing and marketing

Licensee has to obtain approval from international vendor for product design and specifications, as not a representative of international vendor

Could create future competitors.

Have to reveal secrets, intellectual property

Advantages Most tradition and well

established form of operating in foreign market.

Simple with low cost/investment and risk

Can obtain knowledge of foreign market

Increased utilization of domestic plant

Disadvantages Significant investment in

marketing strategy High transport costs Tariffs Problems with local agents Less controls of distribution Exchange rate fluctuations Customs duties and taxes Costs to gain exposure, set

up sales and distribution networks

Product might need to be modified or redesigned to meet local requirements or customer preference

Advantages Full ownership Greater control over

operations Higher profits Can keep company

secrets (patents) to yourself

Able to dictate quality in brand

Disadvantages Larger investment Higher risks Harder to exit

Market Assessment •Market size, growth rate and trends•Regulatory framework•Barriers to entry•Location and distribution channels•Possible exit strategy

Competitive analysis •Intensity of competition•Key players and their positioning•Competitive strategies and benchmarking of key parameters

Consumer Analysis •Consumer segmentation•Consumer Behavior•Identification of un-met needs

Option Generation •Exhaustive option generation•Option evaluation•Shortlist potential opportunities to suit individual

G0-to-market Strategy •Detail financial modeling•Go-to-market strategy covering value proposition, product detailing, pricing, target customer, operating model and mode of entry.•Detail implementation roadmap

Obtain PAN number from Income Tax department

Open a current account Register a Limited Liability

Partnership Register Your Company Register for service tax Register for VAT/Sales tax Excise Duty (if applicable) Customs duty File entrepreneurship

Memorandum at DIC Apply for TAN Find State Specific guidelines &

Procedures Obtain DSC (Digital Signature

Certificate)

Form No.1 - it states that all the requirements of the incorporation have been complied with

Form No. 18 – Notifies the address of the registered office of the proposed company

Form No. 29 - This is a consent obtained from all the directors of the proposed company to act as directors of the proposed company. (Not required for pvt ltd company)

Form No. 32 – This states the appointment of the proposed board of directors from the date of incorporation of the company and is signed by any of the acting directors

The major regulations of law in India affecting foreign investment are:

The Foreign Exchange management Act of 1999 ("FEMA") – regulates foreign collaboration and equity participation in India

The Companies Act of 1956 – regulates corporations and their management in India

The Industries Act of 1951 – governs industrial regulations

The Monopolies and Restrictive Trade Practices Act of 1969 – governs restrictive and fair trade practices

The New Industrial Policy of 1991 – lays down the policy and procedure for foreign investment

The corporate income tax effective rate for domestic companies is 35% while the profits of branches in India of foreign companies are taxed at 45%. Companies incorporated in India even with 100% foreign ownership, are considered domestic companies under the Indian laws

India has entered into tax treaties with a number of countries including, Australia, Belgium, Canada, Denmark, France, Germany, Indonesia, Japan, Korea, Mauritius, Singapore, the United Kingdom and the United States. These treaties endeavor to avoid double taxation and attract know- how and technology. In many treaties the withholding tax on royalties and fees for technical services coming from India is lower than the general tax rate

The New Export-Import Policy of 1992 provides substantial tax incentives for investments in Export Oriented Units ("EOU's")

Concessional rent for lease of industrial plots Preferential power allocation and supply Exemption from import duty for capital goods and raw

materials for power sector industries as well as for trading companies primarily engaged in export activity

And industries located in the Export Processing Zones ("EPZ's")

Import duty exemption Complete tax holiday Decentralized "single window clearance”

Remain Competitive High Performance Management and

Benchmarking Management Audit & Review Joint Ventures, Partnerships & Strategic Alliances Assistance in Private Equity

Investments Identification of Key Managerial

Personnel Market Research & Feasibility studies

M&A advisory Acquisition Infusion of Private Equity Investments, HNI’s, Venture Capital Funds Due Diligence, Post-Merger Integration

Build Conceptualization Market Sizing India Entry Strategy, find which is

best route. Startups Strategic/Business planning

(Formulate business Growth Plan and Business Strategy for 3-5 years)

Feasibility studies Identification of Local partner,

representative

Grow Corporatization & Professionalization

of Entrepreneurial firms Sales and Marketing Strategy Generate capital raising alternatives Prepare investment kit for fund

raising Management support for startup

ventures

Commencement •Understand vision•Missions and goals•Discuss assumptions and plans

Industry Analysis •Current industry status•Future opportunity•Market, consumer and competitor analysis

Business Unit analysis

•Corporate structure•Culture•Processes and operations

Validation •Validation of key findings

Strategy Formulation

•Use multiple techniques to be future ready

Delivery •Presentation and delivery of the report

Implementation •Assistance in implementing the strategies

Senior partners involved in every assignment

Specialized expertise Higher degree of confidentiality Less bureaucratic, more flexible thus

faster delivery and turnaround times Identify key personnel Review of current business model

D’Essence

Investment Banks

Venture Capitalists

Banks

Private Equity Funds

Senior Corporate Leaders

Entrepreneurial Firms

International Network

Associates

Domain Specialists – CA’s

Lawyers, CS

Trade Associates

Our strong network of relationships woven over years of associations enables us to provide you with best market access, and growth options.We work with reputed VC’s Private Equity Funds, Corporates and HNI’S”

D’Essence Consulting,303, Aar Pee Centre

11th Road, Gufic CompoundMIDC, Andheri (East)

Mumbai – 400093India Fax- +91-22-2822 8142 / Tel- +91-22-2834

7425www.dessenceconsulting.com

Email: chandni@dessenceconsulting.comTel direct +91-22-28228142

.