MODULE 1: Background

WHY INDIA?

GENERAL BACKGROUND

GOVERNMENT

ECONOMY OVERVIEW

Time: Indian Local time is five and half-hours ahead of Greenwich Mean Time (GMT + 5 1/2). For a calculation of the time difference between U.S. Central and Indian Standard time, add eleven and a half hours to the current U.S. Central Standard time. A common joke in India is to say that one is operating on "Indian Standard Time," which means to be a bit late!

Capital City: New Delhi is the capital of India and, like Washington, D.C., is its own National Capital Territory. The current population of Delhi is estimated to be about ten million.

Geography: India shares borders to the northwest with Pakistan, to the north with Nepal, Bhutan and Chinese-controlled Tibet, and to the east with Bangladesh and Myanmar (Burma). To the west lies the Arabian Sea, to the east the Bay of Bengal, and to the south the Indian Ocean. Sri Lanka is situated off the southeast coast, and the Maldives off the southwest coast. The far northeastern states and territories are all but separated from the rest of India by Bangladesh as it extends northwards from the Bay of Bengal towards Bhutan. This area of nations as a whole is called "South Asia," a designation that includes Afghanistan. The Himalayan mountain range to the north and the Indus River (west) and Ganges River (east) form a physical barrier between India and the rest of Asia. The geography of India itself can be divided into five regions: western, central, northern (including Rajasthan and the disputed territories of Jammu and Kashmir), eastern, and southern. Furthermore, the Indian landmass is often called the "subcontinent." The southern half of India is sometimes referred to as "peninsular India" as well. See this site for an interactive map of India: http://www.mapsofindia.com/maps/india/h3i00.htm

Population: India's population is approximately one billion, growing at 1.71% per year. India is home to one sixth of the world's population (1,029,991,145 estimated in the 2000 census) and is geographically the second largest country in Asia (approx. 1,269,219 sq miles). The average population density in 1991 was 267 people per square mile. See http://www.countrywatch.com/ or http://www.censusindia.net/for the most current statistics.

Language: English is the language of business and higher education throughout India. Though English is not an official language in India, the country is home to the third largest population of English speakers in the world, surpassed only by the U.S. and the U.K. Many Indian advertisements, road signs, billboards, marques, and products are presented in English. Any businessperson conducting work in India should be comfortable communicating with others in English.

An important official language of India is Hindi, which is spoken by about 30% of the population, most of whom live in the northern states of India. In addition, there are 17 other official languages recognized by the Constitution (Assamese, Bengali, Gujarati, Kannada, Kashmiri, Konkani, Malayalam, Manipuri, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Sindhi, Tamil, Telegu and Urdu). Language is a politicized issue in India, and many state boundaries have been drawn along linguistic lines.

Though most Indian business people will communicate comfortably in English, speaking a few common words of Hindi, Tamil, or another language can go a long way in India and elicit a smile from one's Indian business partners and customers. For simple phrases, see http://www.gorin.com/phrase/hindi.html or http://thor.prohosting.com/~linguist/hindi.htm for Hindi, and http://www.gorin.com/phrase/tamil.html or http://www.singarachennai.com/singarachennai/survivalkitdefault.asp for Tamil.

Principal Religions: India is constitutionally a secular state, like the United States. Most people, as in the U.S., profess adherence to a religion. Approximately 80% of Indians describe themselves as Hindu, 14% Muslim, 2.5% Christian, 2% Sikh. The remainder consists of Buddhists, Jains, Zoroastrians or Parsis, and a very small number of Jews. See this site for a brief survey of these religions in India: http://adaniel.tripod.com/religions.htm

GOVERNMENT

India is a federal republic with certain powers reserved to the 25 states. The political system is democratic. The constitution provides for a parliamentary system of government with a bicameral parliament and three branches: the executive, legislative, and judiciary.

There are six Union Territories in India which are governed from Delhi: the Andaman and Nicobar Islands; Chandigarh; Dadra and Nagar Haveli; Daman and Diu; Lakshadweep; and Pondicherry.

Executive and Legislative Branches: The Head of State is the President, however, executive power is vested in the Prime Minister. India has been a republic since 1947 when it gained independence from the British. Pakistan (then East Pakistan) and Bangladesh (then West Pakistan) were formed at that time as well. The President of India is Kocherit Raman Narayanan, who has served since 1997. The current Prime Minister is Atal Behari Vajpayee, who has served since 1998. The current governing political party in India is a coalition led by the Bharatiya Janata Party (BJP) or the Indian People's Party. The main opposition party is the Congress (Indira) party, which until recently had enjoyed an almost dynastic rule in Indian government.

Judicial System: The Supreme court is the apex judicial authority. There are high courts in every state and lower courts at local levels.

ECONOMY OVERVIEW

India's current GDP is rated at U.S.$ 471.2 billion (2000), according to the World Bank. The country has foreign exchange reserves of U.S. $ 35.6 billion (August 2000). Per capita net national product at current prices is 14,682 rupees for the year 1998/99.

Percentage of GDP in 2000, composition by sector:

Agriculture, including mining and quarrying – 25.3%

Industry including construction, electricity, gas and water supply – 26.2%

Services – 48.5%

Exports of goods and services - 12.4%

Imports of goods and services - 16%.

India's industrial economy continues to invest heavily in advanced technology initiatives such as digital communications and space research.

India's energy requirements are met by oil, most of which is imported despite the growth of indigenous production and hydroelectric schemes, mostly based amid the powerful northern rivers. Mining is a relatively small sector, but does produce iron ore and cut diamonds for export. India's main industrial development has been in engineering, especially transport equipment (a major export earner), iron and steel, chemicals, electronics and textiles.

Economic reforms have been underway since the beginning of the 1990s, under which trade has been liberalized, the public sector scaled back, and state-owned industries privatized. These reforms were developed with and approved by the IMF, which has supplied substantial credits to India. As economic reforms are always ongoing, be sure you have the most current information available.
(See module 3 and module 4.)

Currency:

This is an image of a 1000 rupee note, roughly the equivalent of $20.

1 Rupee = 100 Paise 100,000 Rupees = 1 Lakh 10,000,000 Rupees = 1 Crore

Exchange Rate: The rupee has recently traded between 45-50 per $1 U.S. For the current rate of exchange consult a bank or visit the Universal Currency Converter website at: www.xe.com/ucc/

Exports: U.S. $ 37.54 billion (1999-00)
Imports: U.S. $ 46.15 billion (1999-00)