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JPMorgan Indian Investment Trust plc

January 2010

Rukhshad Shroff, CFARajendra Nair, CFA

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Two consecutive, outlier years

Positive Years: 22 (73%) 2004 13

Negative Years: 8 (27%)2002 4

1997 19

2001 -18 1994 17 2007 47

2000 -21 1993 29 2006 47

1998 -16 1989 17 2005 42 2009 80

1996 -1 1984 7 1992 37 2003 73

1995 -21 1983 7 1990 35 1999 64

1987 -16 1982 4 1988 51 1991 82

2008 -52 1986 -1 1980 25 1981 54 1985 94

Year % Year % Year % Year % Year %

-30 to -60 -30 to 0 0 to 30 30 to 60 >60

Range of returns (%)

Source: MOSL, 11/1/10

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JPMorgan Indian Investment TrustCumulative performance to 30thSeptember 2009

* Includes the return from the bonus of subscription shares in November 2008Source: Morningstar, JPMAM. Total returns in .

1 Year 3 Years 5 Years 10 Years % % % %

JPM IndianDiluted NAV 28.7 35.5 205.7 350.0

JPM IndianUndiluted NAV 37.5 44.8 226.6 380.8

JPM IndianReturn to Shareholders 45.1* 34.5 198.0 490.1

MSCI India Index# 47.1 56.6 238.7 255.6

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JPMorgan Indian Investment TrustPerformance update

^ Inception: 1/7/94* Undiluted. Excludes the impact of any subscription share dilutionSource: Morningstar, JPMAM. Total returns in .

Since Inception^6 months 1 Year 3 Years 5 Years 10 Years Annualised

% % % % % %

JPM IndianNAV* 25.2 59.2 36.0 186.5 260.9 9.9

MSCI India Index# 31.4 80.6 50.5 206.7 235.7 7.6

Relative performance -6.2 -21.4 -14.5 -20.2 25.2 2.3

Fund Size 462.3m

As at 31stDecember 2009

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JPMorgan Indian Investment TrustCumulative performance since launch

0

100

200

300

400

500

600

7/94 7/95 7/96 7/97 7/98 7/99 7/00 7/01 7/02 7/03 7/04 7/05 7/06 7/07 7/08 7/09

JPM Indian IT (NAV)

JPM Indian IT (Share Price)

MSCI India (NDR) (Prior to 1 Oct 03, BSE100)

Source: Bloomberg, JPMAM, Thomson Reuters Datastream


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JPMorgan Indian Investment TrustTop ten holdings

Stock Name Sector Market Cap m % of Fund

1 Reliance Industries Energy 47,691 12.0

2 Infosys Technologies Information Technology 19,836 10.8

3 HDFC Bank Financials 9,666 6.7

4 Housing Development Finance Corp. Financials 10,136 6.7

5 ICICI Bank Financials 12,993 6.0

6 Bharat Heavy Electricals Industrials 15,655 4.9

7 Tata Consultancy Services Information Technology 19,540 3.5

8 Tata Motors Industrials 2,660 2.8

9 Maruti Suzuki India Consumer Discretionary 5,998 2.7

10 Infrastructure Development Finance Financials 12,603 2.7

58.82

Source: JPMAM


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JPMorgan Indian Investment TrustSector weighting

Source: JPMAM


5.6%

12.4%

3.9%2.6%

4.6%

14.2%

1.0%

30.1%

15.8%

9.8%

Financials

Energy

Information Technology

IndustrialsMaterials

Consumer Discretionary

Utilities

Health Care

Consumer Staples

Cash

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7

Big picture view

We think the Indian economy can double in 5-6 years time to ~US$2 trillion.

The share of investment, historically neglected, will increase as India finally takes infrastructure seriously.

Consumption will continue to grow and remain dominant, driven by favourable demographics.

Corporate earnings could double in ~4-5 years

Foreign investment + re-allocation of domestic savings pool = positive for equities

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8

India remains a compelling early stage growth opportunity

Source: IMF, Morgan Stanley Research, 7/1/10

0

10,000

20,000

30,000

40,000

50,000

60,000

0 10 20 30 40 50 60

Years from Beginning of Economic Progress

PPP-Adjusted Per Capita GDP, US$

India Philippines

Malaysia

Korea Taiwan

Japan

Hong Kong

China

Singapore

Thailand

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Reaping the demographic dividend

Source: NCAER; E= NCAER estimates, 7/1/10

Growing Middle Class (% Share of Households)

* Note: Africa includes a group of 56 countries. Source: UN, Morgan Stanley Research, 7/1/10

India the Largest Contributor to Growth in the Working Population Over the Next 10 Years

WorldAfrica

IndiaSouth East

Latin America

ChinaWestern AsiaUSA

JapanEurope

Addition to working agepopulation by 2019

StockPosition 2009E

4457568765388379

96314521082500

534159

13854

51

333212

-8-18

In Millions

Low (114)

Middle (75)

Upper-Middle (22)

High (10) 4%

10%

34%

52%Low (135)

Middle (41)Upper-Middle (9)

High (3) 1%5%22%

72%

F2002 F2006E F2010E

Low (132)

Middle (53)

Upper-Middle (14)

High (5) 2%7%

26%

65%

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Positive demographics = growing savings pool = sustainable growth

Source: CEIC, IMF, Morgan Stanley Research, 20/1/10Source: CEIC, CSO, Morgan Stanley Research, 20/1/10

10%

15%

20%

25%

30%

35%

40%

F1970 F1976 F1982 F1988 F1994 F2000 F2006

Savings Investments

% of GDP

0

10

20

30

40

50

60

China

Singapore

Malaysia

India

Thailand

HongKong

Ind

onesia

Korea

Japan

Taiwan

EU

US

% of GDP

Savings as % of GDP, 2008

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Low penetration will drive consumption

Source: IIFL,15/1/10

Source: Bloomberg, CEIC, Government Statistics Departments, 7/1/10

Domestic Two Wheeler Volumes % of Population Owning Two Wheelers

Auto Penetration (vehicles per thousand) versus GDP perCapita (PPP adjusted)

Source: IIFL,15/1/10

0

2

4

6

8

10

FY84

FY85

FY86

FY87

FY88

FY89

FY90

FY91

FY92

FY93

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10ii

Mn units

0

20

40

60

80

Malaysia

Thailand

VietnamItaly

Indonesia

Japan

Spain

Germany

France

China

Brazil

ArgentinaIran

India

UK

Russia

P

hilippines

TurkeyUS

Mexico

%

China

U.S.

Japan

UKGermany

Poland Czech Republic

PortugalDenmark

France

Spain

Netherlands

Italy Canada

Taiwan

South Korea

Brazil

MexicoRussia

MalaysiaHungary

Norway

India0

250

500

750

1,000

0 10,000 20,000 30,000 40,000 50,000 60,000

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...while rising infrastructure spending will be another pillar of growth

E = Morgan Stanley Research estimates;Source: Morgan Stanley Research, 14/1/10

E = Morgan Stanley Research estimates;Source: Morgan Stanley Research, 14/1/10

India: Infrastructure InvestmentIndia: Infrastructure Investment

3%

4%

5%

6%

7%

8%

F2000

F2001

F2002

F2003

F2004

F2005

F2006

F2007

F2008

F2009E

F2010E

F2011E

F2012E

% of GDP

0

20

40

60

80

100

120

140

F2000

F2001

F2002

F2003

F2004

F2005

F2006

F2007

F2008

F2009E

F2010E

F2011E

F2012E

US$ bn

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Infrastructure: Where is the money going?

Assumed USD/INR = 40 for F2008-F2012Source: Planning Commission, Morgan Stanley Research, 20/1/10

US$ bn

0

20

40

60

80

100

120

140

160

180

Electricity Roads Telecom Railways Irrigation Water Ports Airports Storage Gas

F1998-F2002 IXth F2003-F2007 Xth

F2008-F2012 Xith (E)

Infrastructure Spending

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E = Morgan Stanley Research estimatesSource: Morgan Stanley Research, 15/1/10

E = Morgan Stanley Research estimatesSource: Morgan Stanley Research, 15/1/10

India & China: Infrastructure Investment (US$ bn)India & China: Infrastructure Investment

Chindia: Comparisons are at least indicative

0%

2%

4%

6%

8%

10%

12%

99 00 01 02 03 04 05 06 07 08

India China

% of GDP

0

50

100

150

200

250

300

350

400

450

99 00 01 02 03 04 05 06 07 08

India China

US$ bn

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C + I = higher and more resilient growth

Source: CSO, CEIC, Morgan Stanley Research, 1/12/09

Quarterly GDP Growth Trend (% YoY)

6.9

0

2

4

6

8

10

12

6/97 12/97 6/98 12/98 6/99 12/99 6/00 12/00 6/01 12/01 6/02 12/02 6/03 12/03 6/04 12/04 6/05 12/05 6/06 12/06 6/07 12/07 6/08 12/08 6/09

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Source: CSO, Morgan Stanley Research, 7/1/10 Source: Ministry of Commerce, Morgan Stanley Research, 7/1/10

Export Decline NarrowsIndustrial Production

A near V shaped recovery

0%

2%

4%

6%

8%

10%

12%

14%

16%

02 03 04 05 06 07 08 09

YoY%YoY%, 3MMA

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

6/96 6/98 6/00 6/02 6/04 6/06 6/08

US$ Terms

Rupee Terms

YoY%, 3MMA

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Ultimately feeding through into corporate earnings

Source: MOSL, 11/1/10 Source: MOSL, 11/1/10

Sensex EBITDA GrowthSensex Sales Growth


Sensex PAT Growth (YoY)

25283942 33

24

126

313043 33 30 26

171925 21

-11-16-20-18

18

39

1QFY05

2QFY05

3QFY05

4QFY05

1QFY06

2QFY06

3QFY06

4QFY06

1QFY07

2QFY07

3QFY07

4QFY07

1QFY08

2QFY08

3QFY08

4QFY08

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10E

4QFY10E

2027

34

23 21 20 1622

33 30 3222

37 36 3844

31 28

4

-7-12

-5

1928

1QFY05

2QFY05

3QFY05

4QFY05

1QFY06

2QFY06

3QFY06

4QFY06

1QFY07

2QFY07

3QFY07

4QFY07

1QFY08

2QFY08

3QFY08

4QFY08

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10E

4QFY10E

1724

37

24 26

10 1118

2531

37

22 2628

20 2325

19

-8-13-10

-5

25

41

1QFY05

2QFY05

3QFY05

4QFY05

1QFY06

2QFY06

3QFY06

4QFY06

1QFY07

2QFY07

3QFY07

4QFY07

1QFY08

2QFY08

3QFY08

4QFY08

1QFY09

2QFY09

3QFY09

4QFY09

1QFY10

2QFY10

3QFY10E

4QFY10E

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Earnings could double in less than 5 years

81 129

181 250 266 291 278 280 216 236

272 348

450 523

718833 820 814

1076

1308

1576

1874

FY93

FY94

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10E

FY11E

FY12E

FY13E

FY14E

FY93-96:

45% CAGR

FY96-03: 1% CAGR

FY03-08:

25% CAGR

FY08-10E:

-1% CAGR

FY10-14:

23% CAGR


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Valuations: Not cheap, but.

Source: FactSet, MSCI, Morgan Stanley Research, 14/1/10

MSCI India PE

5

10

15

20

25

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Average

since 1995


MSCI India PB

0

1

2

3

4

5

6

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Average

since 1995

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Institutional activity is getting more balanced

Source: SEBI, BSE, Morgan Stanley Research, 19/1/10 Source: SEBI, BSE, Morgan Stanley Research, 19/1/10

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

C2000 C2001 C2002 C2003 C2004 C2005 C2006 C2007 C2008 C2009

FII (Cash)Domestic mutual funds flowsInsurance co. flows

US$ mn

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Risks

Inflation and interest rates

Global risk appetite

Oil price

Twin deficits

Geopolitics

The unexpected

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Summary

India remains a compelling early stage growth opportunity

Infrastructure spending and consumption will drive GDP growth

Which in turn will drive earnings growth and profitability

The opportunity will be punctuated by risks and volatility

yet, the market could potentially double in 3-4 years

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Appendix

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The JF and JPMorgan India team

The India team

Edward PullingManaging Director,

15 years of India-related experience

Rukhshad ShroffManaging Director,


Rajendra NairVice President,


Johnny WongDealer,


Nandkumar SurtiVice President,


Harshad PatwardhanVice President,


Amit Gadgil


Ravi Ratanpal4 years of India-

related experience

Rohit Agarwal4 years of India-related

experience

Karan Sikka4 years of India-

related experience

The Hong Kong team

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2009: An extraordinary turnaround

Source: FactSet, MSCI, Bloomberg, 14/1/10Please note : China A Share : SHCOMP, for H-Share : HSCEIACWI : All countries world index (Developed world + Emerging markets)World Index : Developed markets

-75%

-50%

-25%

0%

25%

50%

75%

100%

125%

Indonesia

India

ChinaA-

Share

Taiwan

EM

Korea

APxJ

Singapore

ChinaH-

Share

ACWI

Europe

2009 2008

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..as BRIC economies lived up to the hype

Source: IMF, 11/1/10

-15

-10

-5

0

5

10

15

20

1

990

1

991

1

992

1

993

1

994

1

995

1

996

1

997

1

998

1

999

2

000

2

001

2

002

2

003

2

004

2

005

2

006

2

007

2

008

20

09F

20

10F

20

11F

20

12F

20

13F

20

14F

Brazil China India Russia US Euro zone

%

GDP growth %

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Relative performance (on a FY basis)

-60

-40

-20

0

20

40

60

80

100

F95 F96 F97 F98 F99 F00 F01 F02 F03 F04 F05 F06 F07 F08 F09

Fund return

Benchmark Return

%

Source: JPMorgan Chase & Co., 31/12/09Benchmark: MSCI India Net

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Performance review: 2009 = the worst of all worlds

Bottom up, stock specific

Medium/long term time frame, with an average of3 years holding period

Overweight domestic growth plays

Quality & blue chips penalised

~9% cash in 1Q

Our Strategy The Market

Macro, factor driven

Extreme volatility in the last 12 months, withstrong rotational tendencies

Driven by global commodities, beta and leverage

Leverage and beta rewarded

~100% move up in 3 months

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XIth Five Year Plan Infrastructure Spending EstimatesInfrastructure Spending

Infrastructure

Source: Planning Commission, Morgan Stanley Research, 15/1/10Assumed USD/INR = 40 for F2008-F2012

Source: Planning Commission, Morgan Stanley Research, 15/1/10Assumed USD/INR = 40 for F2008-F2012

0

100

200

300

400

500

600

VIIIth IXth Xth Xith est

Infrastructure Spending

Five Year Plans

US$ bn

380

400

420

440

460

480

500

520

540

Planning Commission MS

XIth Five Year plan Infrastructure Spending Estimates

US$ bn

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Source: Planning Commission, 15/1/10

Source of FundingSources of Funding: Debt & Non-Debt

But who will fund it?

Non-Debt

US$267 bn

DebtUS$247 bn

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

F2002-F2007 F2008-F2012

Publ ic Private

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Infrastructure: Where is the money going?

Sector F1998-F2002 F2003-F2007 F2008-F2012

IXth plan Xth plan Xith plan (E)

Electricity 29 64 167

Roads 3 32 79

Telecom 10 23 65

Railways 10 26 65Irrigation 13 24 63

Water 9 14 36

Ports 2 3 22

Airports 2 1 8

Storage 0 1 6

Gas 0 2 4

Total spending (US$ bn) 78 190 514


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Debt Sources

Infrastructure financing

Gap

US$41 bn

Domestic Bank

CreditUS$106 bnPension/

Insurance Companies

US$14 bn

External Commercial

Borrowing

US$31 bn

Non-Bank Finance Companies

US$56 bn

Centre

US$191 bn

Private

US$155 bn

States

US$168 bn

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Urbanisation will be a structural growth driver

Source: UN population division, World Urbanisation prospects, 7/1/10

0

10

20

30

40

50

60

70

80

90

100

USA European union China India

2005 2030

%

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Investment themesRoads: Ambitious plans

Source: NHAI, Morgan Stanley Research, 7/1/10

0

200

400

600

800

1000

1200

1400

1600

1800

6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 9/08 12/08 3/09 6/09 9/09 11/09 Target

Qtrly Avg in

F2006 = 245kms Qtrly Avg inF2007 = 193kms

Qtrly Avg in

F2008 = 475kms

Qtrly Avg in

F2009 = 656kms Avg b/w

Jun-Nov09 = 498kms

Target is to take the qtrly avg to 1750kms

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Investment themesInsurance

World Insurance Penetration Rate(Premium as % of GDP) in 2008

World Non-Life Insurance Premium Growth5 Year (CAGR)

World Life Insurance Premium Growth5 Year (CAGR)

16.2 15.7

11.89.2 8.7 7.8 6.6

4.4 4.3 3.3 3.0 2.3 1.7 1.4 1.3

0

5

10

15

20

Taiwan

U

K

South

Kore

a

Franc

e

U

S

Singapore

German

y

Ind

ia

Malaysia

Chin

a

Brazil

Russia

Mexic

o

Philippine

s

Indones

ia

%

-40

-20

0

20

40

Indonesia

India

China

Brazil

Mexico

UK

Taiwan

Singapore

Philippines

Malaysia

SKorea

World

France

US

Germany

Russia

%

Source: IIFL, 11/1/10 Source: Swiss Re, CEIC, IIFL Research, 11/1/10

Source: IIFL, 11/1/10

0

10

20

30

Russia

China In

dia

Brazil

South

Korea

Mexico

Indonesia

Philippines

World

Singapore

Malaysia

France

Taiwan

US

Germany UK

%

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Source: CEIC, Morgan Stanley Research,15/1/10 Source: CEIC, Morgan Stanley Research,15/1/10

China leads India by a wide margin..

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

03 04 05 06 07 08 09

India Bank Credit to Commercial Sector

China: Credit

US$ bn

20%

40%

60%

80%

100%

120%

140%

03 04 05 06 07 08 09

India Credit to GDP

China: Credit to GDP

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but does she offer a glimpse into Indias future?

Source: FactSet, 15/1/10

0

50

100

150

200

250

300

350

400

SBI ICBC Bharti Airtel China Mobile RIL PetroChina

US$ bn

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Relative valuations


MSCI PB: India relative to EM

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Average

since 1995


MSCI PE: India relative to EM

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Average

since 1995

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The valuation premium is well deserved

Source: Worldscope, FactSet, Morgan Stanley Research, 14/1/10

0%

5%

10%

15%

20%

25%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

India EM AC World Asia Pac ex-Japan BRIC

ROE trends

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Risks: Inflation is a concern in the short term..

Source: CEIC, Morgan Stanley Research, 19/1/10

-10%

-5%

0%

5%

10%

15%

20%

4/95 2/96 12/96 10/97 8/98 6/99 4/00 2/01 12/01 10/02 8/03 6/04 4/05 2/06 12/06 10/07 8/08 6/09

Headline Inflation (WPI)Non Food InflationFood Inflation

YoY%, monthly average

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but monetary tightening is not bad for equities in the long term

Source: Bloomberg, RBI & CLSA 15/1/10

4

5

6

7

8

9

10

1/04 7/04 1/05 7/05 1/06 7/06 1/07 7/07 1/08 7/08 1/09 7/09 1/10

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

CRR Sensex (RHS) Repo

(%)

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Risks: Fiscal deficit is a concern but is improving incrementally

Note: *Here the off-budget items include expenditure on food, fertilizer and oil. E = Morgan Stanley Research estimates.Source: RBI, Economic Survey, Ministry of Finance, Morgan Stanley Research, 7/1/10

-2%

0%

2%

4%

6%

8%

10%

12%

14%

F1990

F1991

F1992

F1993

F1994

F1995

F1996

F1997

F1998

F1999

F2000

F2001

F2002

F2003

F2004

F2005

F2006

F2007

F2008

F2009E

F2010E

F2011E

F2012E

Central Fiscal Deficit State Fiscal DeficitIntergovt Transfers Major off-budget itemsCombined Headline Deficit*

As % of GDP

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Risks: Global risk appetite

Source: Bloomberg, 14/1/10

0

5000

10000

15000

20000

25000

00 01 02 03 04 05 06 07 08 09

0

200

400

600

800

1000

1200BSE Sensex Trend EMBI spread (RHS)

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RisksOil!

Source: CEIC, Morgan Stanley Research, 14/1/10 Source: FactSet, MSCI, Morgan Stanley Research, 14/1/10

-6%

-4%

-2%

0%

2%

4%

6%

3/01 12/0 9/02 6/03 3/04 12/0 9/05 6/06 3/07 12/0 9/08 6/09

0

20

40

60

80

100

120

140

WTI US$ per barrel (RHS)

Current Account (as % of GDP, annualized)0

20

40

60

80

100

120

140

3/01 12/0 9/02 6/03 3/04 12/0 9/05 6/06 3/07 12/0 9/08 6/09

-2%

0%

2%

4%

6%

8%

10%

12%

14%WPI Inflation (RHS)

WTI US$ Per Barrel

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Risks: Geopolitics has been a perennial concern

Source: Anand Rathi Securities, 14/1/10

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

1/91 8/92 3/94 10/95 5/97 12/98 7/00 2/02 9/03 4/05 11/06 6/08 1/10

Sensex

Sensex

PM Rajiv

Gandhi's

assasination

Mumbai Serial

Bomb Blasts

Communal riots

across the country

Coimbatore bomb

blast kill 60

Serial blast in

Jaipur

Blast in Indo -

Pak Train

Mumbai train Blasts

Multiple bomb

blasts in Delhi

Twin bomb blasts in

Mumbai including atthe Gateway of India

Indo - Pak Border

Tension

Terror attack on

Indian Parliament

Border conflict

with Pakistan

Nuclear

Tests

Mumbai

Terror

attacks

Blast in Delhi

Blasts inAhmedabad

UPA's

win inGeneral

election

Assam

serial

blasts

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Macro economic forecasts

* Total of Central and State Government deficit does not tally due to inter-governmental transactions. E = Morgan Stanley Research Estimates; Source: RBI, CSO, Budget Documents, and MorganStanley Research.

Source: RBI, CSO, CEIC, Bloomberg, SEBI, Morgan Stanley Research, 14/1/10

Years Ending March 31 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010E F2011E F2012ENational Income

GDP (US$ bn) 478 507 600 700 810 913 1,173 1,157 1,232 1,490 1,814Gross domestic product 5.8% 3.8% 8.5% 7.5% 9.5% 9.7% 9.0% 6.7% 6.7% 8.0% 7.6%Agriculture and Allied activities (incl. mining) 5.9% -5.9% 9.3% 0.8% 5.7% 4.4% 4.7% 1.8% -1.1% 5.0% 3.0%Manufacturing, Constn, Electricity 2.8% 6.9% 7.8% 10.5% 10.7% 11.2% 8.5% 3.9% 8.3% 8.2% 8.3%Services 7.2% 7.5% 8.5% 9.1% 10.6% 11.2% 10.9% 9.7% 8.6% 8.7% 8.7%Money and BankingMoney Supply (M3) growth (avg) 16.2% 16.3% 13.1% 14.2% 16.1% 19.6% 21.8% 20.3% 18.0% 20.0% 20.0%Bank non-food credit (avg y-y increase) 11.9% 25.0% 17.2% 27.5% 33.7% 31.3% 24.3% 24.1% 15.0% 23.0% 25.0%Interest rates91-Day T-Bill Yield (year-end) 6.2% 5.8% 4.3% 5.2% 6.5% 7.4% 7.3% 4.7% 5.3% 6.8% 7.0%Repo Rate (year-end) 8.0% 7.0% 6.0% 6.0% 6.5% 7.5% 7.8% 5.0% 5.0% 6.5% 6.8%PricesWholesale price index (avg y-y increase) 3.7% 3.4% 5.5% 6.5% 4.4% 5.4% 4.7% 8.4% 3.2% 5.3% 5.5%External sectorCurrent account 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Exports (US$ bn) 44.7 53.8 66.3 85.2 105.2 128.9 166.2 188.2 173.9 216.9 261.5Imports (US$ bn) 56.3 64.5 80.0 118.9 157.1 190.7 257.8 301.9 293.4 364.2 441.6Exports as % of Imports 79% 83% 83% 72% 67% 68% 64% 62% 59% 60% 59%Invisibles, net (US$ bn) 15.0 17.0 27.8 31.2 42.0 52.2 74.6 89.6 92.5 115.2 138.3Current account balance (US$ bn) 3.4 6.3 14.1 (2.5) (9.9) (9.6) (17.0) (24.1) (27.0) (32.2) (41.8)Debt creating capital inflows (US$ bn) 2.3 (1.8) (2.1) 6.2 7.0 22.2 24.9 15.1 8.1 14.5 16.5Total capital -net (US$ bn) 8.6 10.8 16.7 28.0 25.5 45.2 108.0 2.4 56.2 67.3 74.8Foreign currency reserves (US$ bn)* 54.1 75.4 111.6 140.1 150.9 198.7 308.7 251.3 292.7 325.0 363.3

Average exchange rate (USD/INR) 47.7 48.4 45.9 45.0 44.3 45.2 40.3 46.0 48.0 44.9 41.6Year end exchange rate (USD/INR) 48.7 47.6 45.0 43.7 44.5 44.0 40.4 51.3 49.0 42.9 41.0

External debt (US$ bn) 98.8 105.0 111.7 123.2 138.1 171.3 224.6 229.9 239.6 255.6 272.1External debt as a percentage of GDP 20.7% 20.7% 18.6% 17.6% 17.1% 18.8% 19.1% 19.9% 19.5% 17.2% 15.0%Fiscal deficit (As % of GDP)-----Central government 6.2% 5.9% 4.5% 4.0% 4.1% 3.5% 2.7% 6.1% 6.8% 5.8% 4.7%

-----State government 4.1% 4.1% 4.4% 3.4% 2.5% 1.9% 2.3% 3.4% 3.4% 2.7% 2.3%-----Consolidated Deficit * 9.9% 9.6% 8.5% 7.5% 6.7% 5.6% 4.9% 9.4% 10.0% 8.4% 6.9%

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Macro indicators

Source: RBI, CSO, CEIC, Bloomberg, SEBI, Morgan Stanley Research, 14/1/10

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

Trade Balance (US$ billion) -6.1 -1.7 -3.1 -5.0 -5.2 -6.2 -6 .0 -8.4 -7.8 -8.8 -9.7 NA

Exports (US$ billion) 12.4 11.4 12.9 10.7 11.0 12.8 13.6 14.3 13.6 13.2 13.2 NAExports (YoY) -16.8% -24% -25% -33% -29% -28% -28% -19% -14% -7% 18% NA

Imports (US$ billion) 18.5 -1.7 -3.1 -5.0 -5.2 -6.2 -6.0 -8.4 -7.8 -8.8 -9.7 NAImports (YoY) -19.2% -37% -32% -37% -39% -29% -37% -32% -31% -15% -3% NA

Foreign Direct Investment (US$ million) 2733 1488 1956 2339 2095 2582 3476 3268 1512 NA NA NA

Foreign Exchange Reserves (US$ billion) 247.8 248.5 251.3 252.1 261.1 263.3 270.3 275.0 278.5 282.8 285.3 282.1

Net FII Flows (US$ million) -869 -539 64 1,477 4,257 695 2,403 827 4,141 1,791 1,142 1,520

Rs/US$1 (period average) 48.8 49.2 51.2 50.1 48.5 47.8 48.4 48.4 48.4 46.7 46.6 46.6

M3 (YoY) 17.9% 19.6% 18.6% 20.8% 20.5% 20.2% 20.0% 19.4% 19.0% 18.3% 17.8% 17.2%

Bank Loans (Non-food credit, YoY) 19.4% 18.5% 17.5% 18.1% 16.1% 15.2% 15.9% 14.2% 13.0% 10.1% 10.5% 12.7%

Deposit Growth Rate (YoY) 20.8% 18.7% 21.0% 19.8% 22.5% 22.0% 21.6% 21.8% 20.5% 19.8% 18.9% 18.0%

Prime Lending Rate 12.3% 12.3% 12.3% 12.3% 12.3% 11.8% 11.8% 11.8% 11.8% 11.8% 11.8% 11.8%

One Year Deposit Rate 8.5% 8.5% 7.8% 7.5% 7.3% 7.0% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5%364 day T-Bill Yield 4.6% 4.7% 5.0% 4.4% 4.1% 4.1% 4.1% 4.5% 4.6% 4.5% 4.5% 4.5%

91 day T-Bill Yield 4.5% 4.7% 4.7% 4.2% 3.5% 3.8% 3.5% 3.9% 4.1% 3.9% 3.9% 4.3%

10 yr Government Bond Yield 5.9% 6.0% 6.6% 6.5% 6.4% 6.8% 7.0% 7.2% 7.3% 7.3% 7.3% 7.3%

Industrial Production 1.0% 0.2% 0.3% 1.1% 2.1% 8.3% 7.2% 10.6% 9.6% 10.3% 11.7% NAManufacturing( in %) 1.0% 0.2% -0.3% 0.4% 1.8% 8.0% 7.4% 10.6% 10.0% 11.1% 12.7% NA

Consumer Goods 3.6% -1.3% 1.3% -4.6% -1.1% 4.4% 9.7% 10.9% 9.4% 11.9% 11.1% NA

Basic Goods -0.7% -0.1% 1.9% 4.5% 3.8% 10.7% 4.7% 7.7% 6.5% 4.6% 6.0% NACapital Goods 6.6% 15.9% 11.8% -6.3% -5.9% -3.6% 13.4% 1.7% 9.2% 13.3% 11.0% NA

Intermediate Goods -7.2% -3.0% 1.9% 7.9% 6.6% 7.9% 9.8% 14.4% 11.2% 15.2% 19.4% NA

Consumer Price Index (YoY) 10.5% 9.6% 8.0% 8.7% 8.6% 9.3% 11.9% 11.7% 11.6% 11.5% 11.5% NA

Wholesale Price Index (YoY)

- All Commodities 4.9% 3.1% 0.8% 1.3% 1.2% -1.4% -0.7% -0.3% 0.5% 1.2% 4.8% NA