The Indian Economy

July 25, 2000

Current Situation OverviewSignificant all around improvement after turbulent period (1998-99)5.7% GDP growth estimated 1999-00 and forecast at 6.3% next yearInflation, driven by higher fuel prices, up from 4.5% Expected to stabilize at 6.5%Industrial environment improves in 1999-00, IIP growth around 8% levelsStronger consumer demand, tentative industrial demand, rising exportsCement, automotive, home goods & services are the fast growing segmentsCorporate sector reports brisk topline growth of >20% and a slightly slower bottomline growth of 18%Margins under pressure due to the mild over capacity in most industriesResurgence in Portfolio Flows (FII) during 2000, FDI flows expected to pick up speed with greater clarity in policy

Current Situation OverviewForeign Debt Under Control at less than 24% of GDPExternal debt service ratio at < 2% of GDPLarge part of debt 40% concessional and short term part is only 5% of total debtForeign Currency Reserves rise to USD 35 bn (8 months import cover)Rupee Depreciation only 2.17% in 1999-00, another 2% since April 2000Annual rate of depreciation estimated to be around 4.5-5%Political situation shows greater signs of stabilityWider dispersion amongst partners makes the coalition less vulnerable

Current Situation Overview (Concerns)Fiscal deficit at around 6% continues to be the main concernSuccessful completion of at least one privatization programApproach to cutting back subsidiesInvestment demand yet to materializeThe much awaited infrastructure boomStep-up In new industrial capacitiesFDI flows to gather momentum (rise to more than 30% of approvals)Water scarcity and drought conditions in several statesIs a concern though it is too early to assess impactLarge government attention needed to manage the crisis

Near Term Outlook Base case growth assuming near normal monsoon is around 6%Fuelled mainly by the growth in consumer demand mainly from rural areasBenign interest rate regime and a liberal Reserve Bank of India policy of creating adequate liquidity in the market to help investment over the next 12 monthsLarge scale investments into infrastructure needed to catapult growth to 8% plus trajectory to make a more meaningful trickle down effect to different parts of the economy

Current Economic PoliciesCenters around strong domestic industry but trade barriers are being dismantled in accordance with commitmentsIncreased importance on housing and rural industrializationProduct patents in place, import curbs lifted on several commoditiesAttempts to create a rural industrial base (around small industry)Investments guided by competitive advantages/ economic considerations rather than licensing restrictions / allowancesStrong industrial growth averaging 7% in the last five yearsSignificant progress in opening up telecom and power sectorsPrivatization of PSUs (GOI holding upto 26%), closure of sick units, repeal of the Urban Land Ceiling Regulations, etc. Significant capital flows generated from 1991 to 1998FDI - $15 Bn; Portfolio (FII) - $12Bn; FCY reserves increased from $2Bn in 1991 to over $35Bn as of April2000

Growth Targets & ImperativesNeed to target GDP growth of 8-10%Liberalize and ease domestic consumption and investmentIndia ranked 41st in competitivenessStrengthen the contribution from the export marketsPromote and channel private and foreign investments into infrastructureRequired investment of $120Bn over next five years to sustain planned growthCurrent domestic savings of 24% needs to be augmented by foreign investments ~ $10Bn p.a.Maintain financial and currency stabilityControlled moderate inflationCap on fiscal deficit, Bill on fiscal responsibility soonClearer focus on planned government capital expenditure

Growth Drivers & BottlenecksContinued demand for consumer items with rising income levelsMore stable agricultural output & rising activity in servicesModerate inflation would enhancing purchasing powerIncreased economic activity in infrastructure sectorTelecom, power, roads, new homesCreation of new logistics infrastructure to drive penetration of consumer goodsRoads, ports and storage facilitiesRed-tape procedure and poor infrastructure still deter foreign investorsFDI levels still low as compared to requirements

Outlook - 3years - Key ThemesGrowth would continue to be led by consumer demand growthInfrastructure would start contributing towards the endRural economy to reduce dependence on agricultureStabilize the rural consumption patternsProvide exponential growth window for consumer goods makersGovernment will step in to support investment climateFiscal deficit levels would continue to be highGovernment expenditure under closer inspectionIndustrial investments guided by competitive advantages/ economic considerations rather than licensing restrictions / allowancesHigh growth will continue in:Infotech, telecom, transport vehicles (mainly personal transport vehicles), consumer electronics, apparel, convenience foods, pharmaceuticals, financial products (savings products)

View From The Rating Agencies

Sheet4

CountryMoody'sS&P

ThailandBa1*BBB- (Stable)

KoreaBaa2BBB (Positive)

PolandBaa1BBB (Positive)

IndiaBa2BB (Positive)

ArgentinaB1BB (Stable)

BrazilB2B+ (Positive)

TurkeyB1B+ (Positive)

RussiaB3SD

All ratings for Long term foreign currency borrowings.

S&P ratings as on April 28, 2000

Moody's as on April 26, 2000

* Under review for possible upgrade

Sheet1

Units1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

CMIE Proj

Population & National Income

Population (as on 1 October)mln. nos.839856872891908927943959975991

GNP at current market pricesRs bln.528060676941864910248120451396815501

GDP at current market pricesRs bln.5355616870598770103781218014098156361770019900

GDP at factor cost (current prices)Rs bln.47785528630879919434110321285314267

GDP at factor cost (con. prices)% change5.40.85.36.27.87.67.855.85.1

GNP: Per capita (current prices)Rupees629370887960970711286129931481216164

GDP: Per capita (current prices)Rupees6383720680959842114301313914951163041815419600

GDP: Per capita (con. prices)Rupees984210422110281162712002

GDP: Per capita (con. prices)% change5.95.85.43.2

Savings Capital Formation & Consumptions (Current Prices)

Gross domestic savings% of GDP24.322.92221.924.224.124.423.1

Gross domestic capital formation% of GDP27.723.423.922.425.425.825.724.8

Pvt. sector capital formation% of GDP1814.21514.316.918.41917.8

Public sector capital formation% of GDP9.79.28.98.18.57.46.77

Consumption Expenditure% of GDP73.673.872.875.77472.673.172.5

Pvt. final cons. exp.% of GDP62.162.561.764.763.662.262.861.4

Govt. final cons. exp.% of GDP11.511.311.11110.310.410.211.1

Per capita pvt. final cons. exp.Rupees396144994992636672748170939810015

Value Added (constant prices)

Agriculture% change3.8-2.36.13.75.40.29.4-16.6-1

Industry (incl. construction)% change7.2-1.34.26.69.312.265.93.76

Services% change5.24.95.47.78.59.888.26.58

GNP (PPP)$ bln.965984105510831157128813841587

Per capita GNP (PPP)$11501150121012201280140015801650

Industry

Index of industrial production% change8.20.62.368.412.75.66.646

Mining & quarrying% change4.50.60.53.57.69.5-1.95.9-1.82

Electricity% change8.58.146.66.45

Manufacturing% change9-0.82.26.18.513.86.76.74.46.7

Cotton & blended yarn% change-17.510.42.71312.46.4-5.5

Cement% change7.510-16.77.911.59.69.15.615

Fertilisers% change9.19.1-1.1-6.615.38.2-1.716.93.8

Finished Steel% change5.15.86.2-0.21720.36.12.9-35

Automobiles% change7.1-8.3-6.218.929.827.215.6-4.4-1.218

Basic goods% change6.96.42.79.48.910.736.51.5

Capital goods% change16-12.14-4.25.74.19.35.312.7

Consumer goods% change6.8-2.25.1411.812.45.25.72.4

Intermediate goods% change4.8-1.44.611.85.319.18.18.15.9

Value of Output (Organised sector)Rs bln.276330743478392248155896

Gross value added: Factory sectorRs bln.556608689812101712611435

Gross value added: Non-fact. sectorRs bln.336355422464580723729

Transport

Railways: freight trafficmln. tns318.4338.2350.1358.7365390.7409429.4420.9450

Cargo handled at major portsmln. tns152.9157.6166.6179.3197.3215.3227.3251.5251.7273

Energy

Commercial energy production% change4.34.80.42.46.86.93.24.1-0.81.8

Commercial energy availability% change6.26.94.63.16.98.85.452.53.1

Coal production (excl. lignite)mln. tns211.7232.8242248.7257.8273.4289.3300.4295.4301.4

Coal importsmln. tns5.95.86.178.18.89.39.41015

Power capacityMW66086690657233076753811718329485940891679325395500

Electricity generation (Pub. Ut.)bln. kwh264.2287301.4324350.5379.9394.5421.3448.4470

Thermalbln. kwh186.6214.2231.5253.6267.7307.6325.9346.1365.8388

Hydelbln. kwh71.672.869.970.582.772.668.674.683.482

Plant load factor (thermal plants) *per cent53.855.357.161606364.464.764.3

T & D Lossesper cent22.922.821.821.421.122.323.4

Crude oil productionmln. tns3330.3272732.235.232.933.832.832.5

Crude oil importsmln. tns20.72429.230.827.327.333.934.53854.5

Petroleum products importsmln. tns8.79.411.312.115.822.522.22425.515

Consumption of petro. productsmln. tns57.759.661.763.768.675.680.788.193.399.2

Consumption of petro. products% change1.63.23.43.27.810.46.59.25.96.3

Natural gas gross productionbln.cu.mtrs.18.618.118.319.422.322.724.625.426.7

Natural gas net productionbln.cu.mtrs.14.416.116.317.320.921.323.123.825

Agriculture

Production

Foodgrainmln. tns.176.4168.4179.5184.3191.5180.4199.4192.4202.5202.1

Ricemln. tns.74.772.972.980.381.87781.782.384.786.9

Wheatmln. tns.55.755.757.259.865.862.169.465.97172

Coarse grainmln. tns.32.726.136.630.829.92934.131.330.928.3

Pulsesmln. tns.14.31212.813.31412.314.213.115.914.9

Kharif foodgrainmln. tns.99.491.6101.5100.4100.195.1103.9101.1102.7102.8

Rabi foodgrainmln. tns.7776.87883.990.485.395.591.399.899.3

Oilseedsmln. tns.18.618.620.121.521.322.124.42225.721.8

Sugarcanemln. tns.241254228229.7275.5281.1277.6276.3290305

Value of output

AgricultureRs bln.1286.614991646188321892310

LivestockRs bln.420.4509584673761851

FishingRs bln.52.8597488102118

ForestryRs bln.929398109124125

Yield

Foodgrainkg/hectare13801380146015001550149016141551

Kharifkg/hectare12301170130213241340129013791362

Rabikg/hectare16401750172017901860180019801832

Agricultural production% change3.7-24.13.64.5-2.19-5.67.8-1.5

Foodgrain% change3.4-4.24.94.13.7-6.110.1-3.35.9-0.1

Non-foodgrain% change4.31.63.12.85.84.17.5-8.710.6-3.5

Per capita availability of foodgrainkg/p.a.186.2171.1169.9172184.9177191185173.7

Gross irrigated area/gross crop areaper cent33.6363636.537.638.338.338.338.3

Fertiliser consumptionkg/hectare67.569.865.566.372.174.476.786.889.9

Employment (Organised)

Public sectormln. nos.19.119.219.319.419.519.419.619.5

Private sectormln. nos.7.77.87.87.98.18.58.78.8

Registered jobseekersmln. nos.34.636.636.336.336.636.637.639.240.2

Corporate Sector (Manufacturing Cos.)

Sales% change15.317.312.91427.221.412.76.2

Private sector% change16.619.613.418.327.724.710.86.66.9

Public sector% change13.313125.428.21217.55.4

Gross Fixed Assets% change19.517.517.918.823.121.219.716.8

Private sector% change1619.522.922.129.525.520.818.110.8

Public sector% change25.414.59.912.610.110.816.913.3

PBDIT% change20.320.310.117.632.5245.14

Public sector% change22.922.69.922.835.326.24.83.43.4

Private sector% change1514.910.62.922.715.26.26.2

Profit After Tax% change11.30.1-20.6109.2103.321.1-38.8-22.8

Public sector% change38.6000035.1-82.20

Public sector% change-124.64.6-12.1937320.1-35.3-20-18.5

PBDIT/Salesper cent11.912.412.112.51313.312.512.3

Private sectorper cent313.813.41414.714.914.213.914.6

Public sectorper cent9.29.79.69.38.99.28.48.5

PAT/Salesper cent2.11.81.32.544.12.21.6

Private sectorper cent332.33.85.45.33.12.32.8

Public sectorper cent-0.3-0.4-0.7-0.70.91.10.2-0.1

Debt/Equitytimes1.961.991.911.531.241.211.351.46

Private sectortimes1.711.81.651.261.041.051.161.291.24

Public sectortimes2.332.332.542.472.162.12.362.34

VOP/GFAtimes2.071.891.821.721.831.841.691.5

Private sectortimes2.022.021.881.81.841.831.621.431.26

Public sectortimes2.241.691.711.591.81.861.881.7

Capital Markets

Capital IssuesRs bln.109.4140275398480309289490428

Public sectorRs bln.658381177132134172315309

Private sectorRs bln.44.457194220348175117174118

EquityRs bln.36.651163225347201128174114

DebtRs bln.72.889112173133108161316314

GDRs/ECBs (floatations)$ mln.24024932152627179429170

GDRs$ mln.24015972050627134629170

Euro convertible bonds (ECBs)$ mln.0896102044800

Secondary Markets

Number of cos. listed on BSENumber247126012861358547025603583258555863

Market capitalisation of BSERs bln.110335411771368143345265463956035429

Market Capitalisation% of GDP20.657.425.14241.843.232.933.830.9

Returns on the CMIE

Overall Share Price Indexper cent33.6303.4-58.889.8-8-18.9-11.6161.4

Trading volumes on BSERs bln.360718457845677501122720733108

Trading volumes on NSERs bln.682294537024145

Public Finance (Centre State & UTs)

Government receiptsRs bln.16511923212124603032315037044409

Government expenditureRs bln.17651994224725853009340338424452

Plan OutlayRs bln.58464872988198211991292

Finances of Central Govt.

Revenue ReceiptsRs bln.55066074175591111011263133915051828

Tax ReceiptRs bln.57667474675792311121288139214871769

Direct TaxRs bln.110154181203270336389483499

% of GDP2.32.62.82.83.12.8

Indirect TaxRs bln.465520565554653777899909988

% of GDP6.36.36.46.45.85.6

ExpenditureRs bln.1053111412261419160717832010232127882839

% of GDP16.215.514.614.314.815.814.6

Plan expenditureRs bln.284310367437474464535591669770

% of Exp.26.927.829.930.829.52626.625.52427.1

Non-plan expenditureRs bln.769805860982113413191475173021192069

% of Exp.73.172.270.169.270.57473.474.57672.9

SubsidiesRs bln.122123120127130133164195247238

% of Exp.11.5119.88.98.17.58.28.48.98.4

DefenceRs bln.154163176218232269295353412457

% of Exp.14.614.714.315.414.515.114.715.214.816.1

InterestRs bln.215266311367440500595657786880

% of Exp.20.423.925.325.927.42829.628.328.231

Budget deficitRs bln.113691231101098132-98

Revenue deficitRs bln.186163186327310297327437656541

Gross fiscal deficitRs bln.4463634026035776026678891123800

% of GDP8.35.95.76.95.64.94.75.76.34.1

Outstanding internal debtRs bln.154017281991245726653079344538904588

% of GDP28.82828.22825.725.324.424.925.9

Money Banking & Interest Rates

Money supply (M3)% change15.819.315.718.422.313.715.21818.418

Scheduled commercial banks

DepositsRs bln.192523762749319538694338505659857140

% change1123.415.716.221.112.116.518.419.3

CreditRs bln.116313151548166321162540278432413688

% change10.213.117.77.427.220.19.616.413.8

Non-food creditRs bln.111812691480157219932442270831163520

% change7.913.516.76.226.822.610.915.113

Bank rate (March-end)per cent1012121212121210.58

Interest on deposits (maximum)per cent9to101211101113131211.5

Prime lending rates (minimum)per cent16.516.519191516.5151413

All Financial Institutions

SanctionsRs bln.191.96220320387555583538756900

% change32.827.545.521.143.35.2-7.940.519.2

DisbursementsRs bln.128.1157222244307348404519559

% change32.941.441.99.725.813.41628.67.6

Prices (Annual Averages)

WPI: Primary Articles% change1318.17.46.912.87.583.411.7

Manufactured goods% change8.411.410.97.810.59.14.14.14.6

Energy% change12.313.21415.66.91.813.612.74.3

All commodities% change10.313.8108.310.87.86.44.86.94.5

Consumer price index6.8

Industrial workers1982 = 100193219240258284312342365

% change11.613.59.97.310.3109.46.813.15.5

Agricultural workers86-87 = 10014116818919521123425626413.2

% change7.619.1133.41210.79.13.411

Urban non-manual employees84-85 = 10016118320221623725928330211

% change1113.510.56.99.59.59.36.911.3

External Transaction

Exports$ mln.18143179981853922213263373183833495350453365036000

% change9.2-0.8319.818.620.95.24.6-47

Agro Products$ mln.3230321931364023422161196868663359946300

Minerals and ores$ mln.750937738887989117711731062891900

Manufacturing$ mln.13007132451399916637204102377924632265752579128000

Imports$ mln.24075195512188323305286623672539162415304184846300

% change13.5-16.711.96.52328.16.66.10.810.6

POL$ mln.603153635919574759297536100448173643210500

Non-POL$ mln.18044141881596417558227332918929118333573541635800

Trade balance: DGCI&S$ mln.-5932-1553-3344-1092-2325-4887-5667-6485-8198-10300

Trade balance: RBI$ mln.-9434-2798-5447-4056-9049-11359-14815-15507-13246-15000

Gross invisible earnings$ mln.74649502933411319155541766521405232442577025940

Net invisible earnings$ mln.-24216201921289856805449101961000792088500

Current account balance$ mln.-9676-1178-3526-1158-3369-5910-4619-5500-4038-6500

Exports% of GDP6.17.17.6888.78.48.3810.3

Imports% of GDP8.17.798.38.710.19.99.99.910

Current account balance% of GDP-3.2-0.5-1.4-0.4-1-1.6-1.2-1.3-1-1.4

Tourist arrivalsmln. nos.1.71.781.811.871.912.192.332.372.4

Foreign Capital Inflow (net)$ mln.82704696516490827359237411031922681728000

Foreign aid (net)$ mln.220430311856189615188671101885799800

External comm. borrowings (net)$ mln.22541463-366685112412852856401043672000

NRI deposits (net)$ mln.15362902001120517211033350112517421000

FDI$ mln.97129315586134321442841356224802500

Portfolio investments$ mln.6424236493579266133121828-681500

Others$ mln.2173-22111161061-377-5686-2429-2184-1148200

FDI Approvals$ mln.4781908238031771109511338108197217

Debt servicing$ mln.89828250765885451087312998126571140410700

Repayments$ mln.502847054181481066898727822969016400

Interest payments$ mln.395435453477373541844271442845034300

Outstanding external debt$ mln.838018528590023926959900893730934709432098231

% of GDP33.13026.323.823.823.5

Debt service ratioper cent35.330.227.525.425.926.222.919.820

Foreign exchange reserves (excl. gold and SDRs): March-end$ mln.22365631643415068208091704422367259752952231000

Rupee exchange rateRs/dollar17.9624.4728.9631.431.3933.435.4737.1142.08

1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

GDP In USD Billion (average rate in the year)298.1625835189252.0637515325243.75279.2993630573330.6148454922364.6706586826397.4626444883421.341956346420.6273764259

GDP Growth5.40.85.36.27.87.67.855.85.1

Inflation WPI10.313.8108.310.87.86.44.86.94.5

CPI (Urban Non-Manual Employees)1113.510.56.99.59.59.36.911.3

Sheet2

1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

GDP% change5.40.85.36.27.87.67.855.85.9

Agriculture% change3.8-2.36.13.75.40.29.4-16.6-1

Industry (incl. construction)% change7.2-1.34.26.69.312.265.93.76

Services% change5.24.95.47.78.59.888.26.58

WPI% change10.313.8108.310.87.86.44.86.94.5

Fisc Defi% of GDP8.35.95.76.95.64.94.75.76.36.3

M315.819.315.718.422.313.715.21818.418

PLR16.516.519191516.515141312.5

Sheet2

000

000

000

000

000

000

000

000

000

000

&A

Page &P

GDP % change

Agriculture % change

Industry (incl. construction) % change

Services % change

WPI % change

Fisc Defi % of GDP

Years

Growth Rate %

GDP, Inflation and Fiscal Deficit

Sheet3

00000

00000

00000

00000

00000

00000

00000

00000

00000

00000

GDP % change

Agriculture % change

Industry (incl. construction) % change

Services % change

WPI % change

Fisc Defi % of GDP

M3

PLR

Correlation Between The Major Economic Indicators

Segment wise break up of external trade

1999

GRBPSUTTLCELCTOTALS

Total Exports3550.974620416.247625256.16821717.5808709411733.650%

Total Imports4370.77068467243.60592638174.19219818.00961296073141.874%

5.0%28.8%35.6%30.6%100%

3.4%51.9%29.5%15.3%100%

1998

GRBPSUTTLCELCTOTALS

Total Exports3305.8518025.9223736.720441.9265510183550%

Total Imports4069.2459371.013587818653.761179723241.577%

5.0%27.5%36.2%31.2%100%

3.4%50.3%30.4%15.8%100%

1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

GDP at factor cost (con. prices)5.40.85.36.27.87.67.855.85.1

Agriculture3.8-2.36.13.75.40.29.4-16.6-1

Index of industrial production8.20.62.368.412.75.66.646

Consumer goods6.8-2.25.1411.812.45.25.72.4

Per capita pvt. final cons. exp.396144994992636672748170939810015

2.5284019187

1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

Cotton & blended yarn-17.510.42.71312.46.4-5.5

Cement7.510-16.77.911.59.69.15.615

Fertilisers9.19.1-1.1-6.615.38.2-1.716.93.8

Finished Steel5.15.86.2-0.21720.36.12.9-35

Automobiles7.1-8.3-6.218.929.827.215.6-4.4-1.218

Consumer goods6.8-2.25.1411.812.45.25.72.4

0.7576758148

0.16257412860.3073014644

Units1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

Basic goods% change6.96.42.79.48.910.736.51.5

Capital goods% change16-12.14-4.25.74.19.35.312.7

Consumer goods% change6.8-2.25.1411.812.45.25.72.4

Intermediate goods% change4.8-1.44.611.85.319.18.18.15.9

0.3291355128

Growth in Key Industries1990-911991-921992-931993-941994-951995-961996-971997-981998-991999-00

GDP at factor cost (con. prices)5.40.85.36.27.87.67.856.85.7

Agriculture3.8-2.36.13.75.40.29.4-16.60.5

Index of industrial production8.20.62.368.412.75.66.646.5

Mining & quarrying4.50.60.53.57.69.5-1.95.9-1.82

Electricity8.58.146.66.45

Manufacturing9-0.82.26.18.513.86.76.74.46.7

Cotton & blended yarn-17.510.42.71312.46.4-5.5

Cement7.510-16.77.911.59.69.15.615

Fertilisers9.19.1-1.1-6.615.38.2-1.716.93.8

Finished Steel5.15.86.2-0.21720.36.12.9-35

Automobiles7.1-8.3-6.218.929.827.215.6-4.4-1.218

Source: CMIE, RIU

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GDP at factor cost (con. prices)

Agriculture

Index of industrial production

Consumer goods

Co-Relation Between GDP, Consumer Demand

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Cotton & blended yarn

Cement

Fertilisers

Finished Steel

Automobiles

Consumer goods

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Cotton & blended yarn

Cement

Fertilisers

Finished Steel

Automobiles

Consumer goods

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Basic goods

Capital goods

Consumer goods

Intermediate goods

Economic StructureSignificant transition in economic structureAgriculture sector employs 75% of the rural workforceIndustrial sector consolidates through liberalizationServices sector stabilizes the economyAlso includes PS/ GOI spending and defenseEconomy largely internal driven and resilientImports account for 10% of GDP, while exports account for 8%

Economic Indicators - Table

Economy and outlookMacro economic overview 1991 - 2001f

A decadefull of false startsForecasts :Citibank estimates

Economy and outlookOther Indicators

Consol--idation amid uncertain policy direction

Economy and outlook Interest rate trends

Falling yields and credit spreads note : GOI -S/A yld.AAA - Ann. yld.Yields in %Sep98Jun99Sep99Mar00Apr00GOI 1 yr 10.4210.7110.4510.119.35GOI 2 yrs11.0410.8910.6110.059.45GOI 5 yrs11.8411.4411.0310.339.82GOI 10 yrs12.1811.7411.6210.8110.35AAA I yr 12.2011.2511.1010.9610.00AAA 2 yrs12.8511.9011.7511.0010.25AAA 5 yrs14.0512.6012.3511.3811.00AAA 10 yrs14.5513.1012.8512.1211.80

Spot Rupee- Recent history

6 month forward premia (in rupees)

Stock Market and the Rupee

Nasdaq and BSE

FX marketsAccessThrough RBI approved authorised dealersINR trading between 9.00 AM to 4.00 PMCrosses trading 24 hoursBased on exposures - assets / liabilities in foreign currenciesLimited freedom on the short INR sideFIIs given flexibility and freedom for entry / exit for hedging purposes subject to some guidelines InstrumentsSpot and forward INR - liquid till 12 monthsPrices available upto 3/5 years, execution on best efforts basis FCY / INR Currency swaps for managing exposuresOther derivative instruments - swaps and (non-INR) options

Citibank dealing strengthsGlobal presenceRated number 1 in FX by Asiamoney and Corporate FinanceCompetitive pricing on entire range of currenciesLargest overnight limit amongst foreign banks: domestic limits on par with largest nationalised bankAbility to handle large volumesLate night desk for crosses trading24 hour order book

ResearchFundamental and technical research on all major currency pairsFocus on Indian Rupee researchWide range of customer communication / market updatesDaily Treasury LetterWeekly Treasury LetterMonthly Indian Rupee Research report Annual Treasury LetterG7 Currencies Weekly ReviewsMonthly Global Economic Outlook

Customer support Customer orientationfocus on building long term FX relationships Technical supportexposure tracking and management systems Integrated hedging approachFunds management and exposure managementFocus on overall portfolio vs individual transactions

Derivative StrengthsPricing capability on any kind of exotic derivative productsAbility to quote finest prices on account of large global derivative presenceExpertise in place for launch of new rupee derivativesFocus on creating customised derivative solutions

DisclaimerAlthough the information contained herein is believed to be reliable, Citibank makes no representation as to the accuracy or completeness of any information contained herein or otherwise provided by Citibank.The ultimate decision to proceed with any transaction rests solely with the customer. Citibank N.A. is not acting as your advisor. Therefore, prior to entering into any proposed transaction, you should determine the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and that you are able to assume these RISKS.The contents of this presentation are proprietary in nature, and may not disseminated in whole or in part without Citibank's written consent.

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