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Lessons for the Indian market: legions of big-name companies have failed in India. Here's how to avoid joining them.(EMERGING MA

By Sheridan Prasso | Chief Executive (U.S.) - April-May, 2008

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That's tremendous news for multinationals, and a reason that India--despite its hurdles--must remain on the top of any company's international strategy. The key, of course, is to learn from the mistakes of the early entrants and get it right.

RELATED ARTICLE: INDIA FAST FACTS

With respect to economic freedom, India was ranked 115th of 157 countries by the 2008 Index of Economic Freedom (www.heritage.org/Index/) with a score of 54.2, somewhat below the average score of 60.3. (Hong Kong ranked the most free at 90.3; North Korea, the least free, scored 3.0.) India's challenges include heavy regulatory burdens, high trade barriers and corruption. Its judicial system is described as "erratic and clogged." Nevertheless, the economy continues to grow on the strength of vibrant services and expanding manufacturing.

Population: 1.1 billion

GDP (purchasing power parity): $2.965 trillion (2007 est.)

GDP (official exchange rate): $1.09 trillion (2007 est.)

GDP (real growth rate): 8.5% (2007 est.)

GDP (composition by sector):

agriculture: 16.6%

industry: 28.4%

services: 55% (2007 est.)

Labor force: 516.4 million (2007 est.)

Labor force (by occupation):

agriculture: 60%

industry: 12%

services: 28% (2003)

Unemployment rate: 7.2% (2007 est.)

Inflation rate (consumer prices): 5.9% (2007 est.) Overall inflation projected to decline from 5.6 percent in 2006-07 to 4.1 percent in 2007-08--as per the official Indian Economic Survey.

Investment (gross fixed): 31.8% of GDP (2007 est.)

Budget:

revenues: $145.2 billion

expenditures: $182.4 billion (2007 est.)

Public debt:

58.8% of GDP (federal and state debt combined) (2007 est.)

Agriculture: rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry, fish

Industries: textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software

Exports: $140.8 billion f.o.b. (2007 est.) commodities: petroleum products, textile goods, gems and jewelry, engineering goods, chemicals, leather products

Exports (by country): China 5.3%, U.S. 13.7%, EU 21.4, UAE 10.3%--Economic Survey '08

Imports: $224.1 billion f.o.b. (2007 est.) commodities: crude oil, machinery, gems, fertilizer, chemicals

Imports (by country): China 11.2%, U.S. 5.8%, EU 14.5%, Saudi Arabia 7.2%--Economic Survey '08

Reserves of foreign exchange and gold: $239.4 billion (31 December 2007 est.)

Debt: external: $165.4 billion (30 June 2007)

Foreign Direct Investment (FDI): $23 billion (2007)

Market value of publicly traded shares: $818.9 billion (2006)

Exchange rates: (Indian rupees per U.S. dollar)--41.487 (2007), 45.3 (2006), 44.101 (2005), 45.317 (2004), 46.583 (2003)

Source: World Fact Book, CIA, March 20, 2008, except as otherwise noted

RELATED ARTICLE: THE 16 PEOPLE TO KNOW IN INDIA

Mukesh Ambani

Chairman & Managing Director, Reliance Industries

India's most valuable company in terms of market capitalization (Ambani is India's richest man), Reliance holds interests in petroleum refining, chemicals, retail; world's leading producer of polyester yarn and fiber.

Rajiv Bajaj

Managing Director, Bajaj Auto

India's second-largest motorcycle maker developed a $3,000 car with Renault-Nissan and has made major cost-savings innovations.

Kumar Mangalam Birla

Chairman, Aditya Birla Group

Birla expanded his father's firm into financial services, telecom (Idea Cellular) and retail; acquired Canadian aluminum maker Novelis for $6 billion. A $24 billion corporation with a market cap of $31.5 billion, Aditya Birla Group's 100,000 employees represent 25 different nationalities.

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Baba Kalyani

Chairman, Bharat Forge

Part of the $2.1 billion Kalyani Group and the world's second-largest forging company, Bharat Forge is based in Pune with factories in India, Europe, the U.S. and China. Customers for its forged and machined auto components include Ford, Toyota and BMW.

Chanda Kochhar

Executive Director, ICICI Bank

India's leading female banker; front-runner to be CEO of India's largest private-sector bank in 2009 when CEO K.V. Kamath retires.

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Anand Mahindra

Vice-Chairman & Managing Director, Mahindra & Mahindra

India's largest tractor and SUV maker, Mahindra & Mahindra plans to launch pickup trucks and SUVs in the U.S. in Spring of 2009. Last year its subsidiary, Mahindra Forgings Global Ltd, acquired a 90.47 percent stake in Schoneweiss & Co. GmbH, a leading German forging company, which supplies DaimlerChrysler Group, MAN, Scania and Volkswagen.

Sunil Mittal

Chairman & Managing Director, Bharti Enterprises

Mittal founded Bharti Airtel, India's largest mobile phone operator, with 50 million customers. He is a Wal-Mart joint-venture partner and has interests in insurance with AXA and in food with Del Monte.

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Shiv Nadar

Chairman & Co-founder of HCL Technologies

India's first computer-maker turned outsourcing and hardware firm with operations in 18 countries and clients that include Cisco, Boeing and IBM, HCL's range of offerings spans product engineering, custom and package applications, BPO, IT infrastructure services, IT hardware, systems integration, and distribution of ICT products. HCL, along with its subsidiaries, had last-12-months (LTM) revenue of $1.65 billion and employed 47,954 professionals.

A.M. Naik

Chairman & Managing Director, Larsen & Toubro

Naik leads India's largest construction and engineering conglomerate with vast operations in the Middle East. Larsen & Toubro also has interests in IT services.

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Nandan Nilekani

Co-chairman & Co-founder, Infosys Technologies

Along with N.R. Narayana Murthy, Nilekani co-founded and has led the giant tech and consulting company, with more than 80,000 employees worldwide. He is best known for telling Thomas Friedman, "The world is flat." Infosys, started in 1981 with $250, is today a global leader in the "next generation" of IT and consulting with revenues of more than $3 billion.

Azim Premji

Chairman & CEO, Wipro Infotech

Sourcing 70 percent of sales abroad, Wipro has kept up its rapid overseas expansion, including the priciest acquisition yet by an Indian software services company--of U.S.-based Infocrossing, for $600 million--and a joint venture with Cisco. It is the world's first CMMi Level 5 certified software services company and the first outside the U.S. to receive the IEEE Software Process Award.

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B. Ramalinga Raju

Chairman & founder, Satyam Computer Services

India's fourth-largest software services exporter, with two European acquisitions last year, Satyam clients include 163 major U.S. corporations across 20 major industrial sectors.

Ayodhya Rami Reddy

Chairman, Ramky Group

India's leading environmental and waste management organization; Ramky today has a nationwide presence and revenue of approximately $250 million across three divisions: Ramky Infrastructure Ltd. (RIL), Ramky Enviro Engineers Ltd. (REEL) and Ramky Estates and Farms Pvt Ltd (REFPL).

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Malvinder Singh

CEO, Ranbaxy Laboratories

India's largest pharmaceutical company, Ranbaxy recently settled with GlaxoSmithKline over rights to the generic version of drug Valtrax. It ranks among the top 10 global generic companies and has a presence in 23 of the top 25 pharma markets of the world.

Ratan Tata

Chairman, Tata Group

Tata comprises 98 operating companies in seven business sectors: information systems and communications, engineering, materials, services, energy, consumer products, and chemicals, with total revenues of $28.8 billion, the equivalent of about 3.2 percent of the country's GDP, and a market capitalization of $56.52 billion as of March '08. Tata Motors is producing the world's cheapest "People's Car" (at $2,500) and recently bought the Land Rover and Jaguar brands from Ford Motor. Tata also owns TCS consulting and Taj hotels.

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Gautam Thapar

Chairman, Thapar Group

Thapar's Ballarpur Industries is India's largest papermaker; other interests include chemicals, infrastructure, engineering and India's first art auction house.

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