The market potential of India over the medium- to long-term is second only to China’s. Since 1991, the Indian economy has been transformed from its protectionist “Licence Raj” system into acompetitive, open economy with leadership in a wide variety ofsectors. When one thinks of India today, one thinks of Information Technology (IT). Indian IT and IT Enabled Services (ITES) firms suchas Infosys, Wipro and Tata Consultancy Services (TCS) are inthe vanguard of global innovatorsthat are revolutionizing how information is used and processed to create value for their clients around the world the Bharatiya Janata Party (BJP)-led and Congress-led coalitions accelerate economic reforms that have seen a progressive liberalization of India’s trade and investment regimes. As India continues to liberalize its economy, foreign direct investment (FDI) and domestic investment (especially in infrastructure sectors) alone will likely drive up India’s potentialgrowth rates to the 7-8% level in themedium term.India is also becoming an important player in global trade. During the1994-2003 period, Indian exportsgrew on average by 12.8% annually (in nominal terms). This compares With a GDP growth rate averaging 6.2% in the last 10 years, many economists have argued that India’spotential rate of GDP growth is in the 6-7% range. We expect India to maintain this potential rate of GDP growth in the medium term with some slowdown expected in the next two years due primarily to a global slowdown.