INDIA

By Diana Berger and Larry Cenotto

Relevant History

• Birthplace of the Hindu religion– Caste system sprang from this

• Meeting Ground between East and West• Invaded Many times

– Persians, Greeks, Chinese nomads, Arabs, Portuguese, British– Too vast for one group to dominate for long– Each invading culture left a mark on India

• Won Independence in 1947• Liberalization of Laws

– Encourages Foreign Investment

Geographic Setting

• Geography– Southern Asia, between Burma and Pakistan– 2.97 million sq. km (1/3 the size of the U.S.)– Divided into three main geological regions

• Indo-Gangetic Plain• The Himalayas• The Peninsula region

• Climate– Very diverse and extreme

• Topography– Himalayan Mountain Range in the north– Relatively flat where majority of population lives

Geographical Map

Physical Map

Family and Family Roles

• Parents usually desire sons and wont stop having kids until they have at least 2 sons

• The most traditional residential unit is the joint family– Usually 3 or 4 patrilineally related generations, all living together

• Women’s roles are starting to change as they now have more career opportunities, especially in urban settings

Education

• Preprimary• Primary

– Age 6-11 [Grades 1-5]

• Middle or Intermediate– Age 11-14 [Grades 6-8]

• Secondary or High School– Age 14-17 [Grades 9-12]

• Higher Levels– Includes Technical Schools, Colleges, and Universities

• English taught primarily in secondary schools

Education

• Gap Between Public and Private Schooling• Rising Literacy Rate

– 1981: 43.7%– 1991: 52.2%– 2004: 64.8%

• Added 182 million literate people from 1991-2004• More than population of Brazil

Politics

• A “Sovereign Socialist Secular Democratic Republic” • Patterned after the British Parliamentary system• 25 States and 7 Union territories

– Each with own government

• Stable Government: No major coups since 1947• Checks and Balances

Politics (Executive Branch)

• President– Constitutional head of the Union Executive – Elected via electoral college of Parliament and State Governments

• Council of Ministers and the Prime Minister– Advise and aid the President, who must follow their advice– Prime Minister is vocal leader of Council

Politics (Legislative Branch)

• President convenes Parliament– Council of the States (“Rajya Sabha”)

• 233 represent States, 12 appointed by President– House of the People (“Lok Sabha”)

• 543 elected, 2 appointed by President

• Duties– Approve and remove members of the Council of Ministers– Amend Constitution– Approve central government finances

Legal System (Judicial Branch)

• Supreme Court is highest body in India’s judicial system– Judges appointed by the President – Settle disputes involving Constitution– Decisions binding on all courts in India

• “Panchayats” rule disputes at the village level • Trademark Protection

– Joining WTO brought standard International Property Right (IPR) protection laws

– The Trade Marks Act of 1999 • Differentiates between well-known and general trademarks

Social Organization

• Ethnic Groups– Indo-Aryan (Caucasoid):72%, Dravidians:25%, Mongloids:3%

• Languages– 22 languages recognized by Constitution– Hindi is the official national language of the government and

primary tongue of 30% of the people – English has associate status

• Most important language for national, political, and commercial communication

Social Organization

• Caste system– Embedded in Indian culture for the past 1,500

years, the caste system follows a basic precept, that people are created unequal

– The ranks in Hindu society come from a legend in which the 5 main groupings, or “varnas”, emerge from a primordial being.

– There are 160 million “Untouchables”• Make up 90% of poor and 95% of illiterate

– Discrimination is technically illegal– More prominent in rural areas

Business Customs

• Lack of Punctuality• Timing away from Religious Holidays• Meeting someone

– Light handshake if meeting a male, “Namaste" if female– No first names

• After meeting– Exchange of gifts (chocolate, perfume, flowers)

• Don’t open in front of person• Sensitivity to religious beliefs

– No alcohol

– No animal products

Religion

• India is a land of many different religions• Hinduism is the predominant religion

– Hindus make up 81%– 820 million in India

• Other Major Religions– Muslim 12.1%– Christian 2.3%

• Although Muslims make up only 13% of population, there are still over 130 million living in India, the 2nd largest Muslim population in the world

Work and Leisure

• Cricket is by far the most popular sport in India– Outranks all other sports played in India combined, in terms of

viewership, media coverage and money involved– Billion $ industry– Major promotional opportunity in India

Work and Leisure

• “Bollywood”– Indian film industry based in former Bombay– Immensely Popular– Most video output in world– Cheap cost of tickets ($0.20/ticket average)– Another viable promotional opportunity

Population

• Current Population:– 2005: 1.098 billion

• Future Projections:– 2015: 1.35 billion– 2025: 1.40 billion– 2050: 1.65 billion

• The average Indian is only 26 years old• 1.06 Males per Female• The areas with the highest population density

– Indo-Gangetic Plain along the Ganges River – Mumbai (formerly Bombay)

Economic Statistics

• India’s GDP is estimated at $3.319 trillion in 2004– 6% of the world’s total, – 4th highest in the world– $3,100 per capita GDP (U.S. $40,100)

• India’s GDP growth rate is 8.4%– 2nd highest in the world (2004)

• High Distribution of Wealth– The Richest 10% hold 33% of India’s wealth– The Poorest 10% only hold 3% of India’s wealth– 29% of the population lives below the poverty line

• 86% of the population lives under $2 per day • 44% lives under $1 per day

Natural Resources and Industries

• Natural Resources– Top resource is coal (4th highest producer in world)– Others include iron ore, manganese, mica, bauxite, titanium ore,

chromites, natural gas, diamonds, petroleum, and limestone

• Industries– Principle industries are textiles, chemicals, food processing,

steel, transportation equipment, cement, mining, petroleum, machinery, and software

– India's oil reserves meet 25% of the country's demand

Available Infrastructure• Transportation

– There are 2,525,989 km of highways and 63,230 km of railways – Railways are the principle mode for both freight and passengers – There are also 333 airports in India

• Communication– 48.9 million phone lines in operation – Exploding cell phone market

• 5.6 million in 2000 to 55 million in 2005– Over 18.5 million internet users – One of the world's largest domestic satellite systems

• Financial– Mumbai has the national banks and stock markets located there

Labor Force

• India’s labor force is over 482 million – 2nd largest in the world (China 761 million)

• Unemployment rate is 9.2%• Labor force by sector:

– Agriculture 60%, – Industry 17%– Services 23%

• By 2050, India is expected to have 1.6 billion people, and have 220 million more workers than China

International Trade Statistics• Imports

– $69.18 billion in 2004– Textile goods, gems and jewelry, engineering goods, chemicals,

and leather manufactures

• Exports– $89.33 billion in 2004– Crude oil, machinery, gems, fertilizer, and chemicals

• The U.S. is India’s leading importer and exporter

• National currency is the Rupee– Exchange rate: 43.94 rupees per $1– Gaining strength in relation to the dollar

in recent years

International Trade Statistics

• Foreign Direct Investment (FDI) is permitted under: – Financial collaborations– Joint ventures– Capital markets via Euro issues– Private placements or preferential allotments

• FDI isn’t allowed in the industries of:– arms and ammunition– atomic energy– railway transport– mining

• The government restricts the amount of equity that a FDI can have, depending upon the industry

Trade Restrictions on U.S. Products

• Must get an IEC # along with a BIN # from the Regional Licensing Authority

• Tariffs• Import Taxes• Customs Fees• Standards on packaging must show:

– Name and address of the importer– Generic name of the commodity – Net quantity in terms of weights and measures– Month and year of packing – Maximum retail sales price (MRP)

Developments in Science and Technology

• Liberalization of Telecommunications Laws • Local and long-distance service provided throughout

all regions of the country • Booming cell phone market

– 5.6 million in 2000 to 55 million in 2005– High demand for the latest technology

• Tech giants using Indian teams to devise software to be used in telecommunications– Indian companies are showing a flair for producing high quality

goods and services at ridiculously low rates– “Like Silicon Valley in 1999” -Business Week