Briefing Book Table of Contents

India
Contents
1. Introduction
1.1 Why India?
1.2 Initial Target States
2. General Country Information
2.1 Physical Environment
2.2 Population / Population Distribution
2.3 National Economy
2.4 National Government
2.5 Lighting, Electricity, and Energy
2.6 Current Government Energy Programs
3. Composite User and Regional Information
3.1 Composite User: Jyoti Mundra from Rajasthan, 42 years old
3.2 Composite User: Abhik Mittra from West Bengal, 48 years old
4. Business Context
4.1 Overarching Business Climate
4.2 Company Structure
4.3 Manufacturing
4.4 Distribution
4.5 Local Financing
4.6 Micro-Enterprise
4.7 Marketing
4.8 User-Business Relationship
4.9 Possibilities in Partnerships
5. Business Models
5.1 Overview of Business Model
5.2 Two Models Applied to India
5.3 Key Assumptions/Deliverable Specifications
6. Bibliography

1. Introduction
1.1 Why India?

India, with a large population of people who do not have access to efficient lighting, is
home to many of our potential users. Eighteen thousand rural villages in India lack
electricity. This automatically puts much of rural India at a disadvantage in comparison
to richer parts of urban India. Lighting is useful for many things, from children being
able to study at night to parents being able to make a few more crafts that they can
sell for more money. Recognizing this fact, the Indian government is in the process of
bringing electricity to these villages. However, it will take many years before the
majority of these communities, some being located in very remote areas, can reliably
be put on a grid. The government therefore hopes to bring these people efficient lights
that they could use until they have access to electricity. Our LED lights, with their
numerous benefits over other types of lights, can possibly be what the Indian
government is looking for. India's political and economic stability, relatively strong
infrastructure, and various established manufacturing centers also present a beneficial
environment for a new business venture.

1.2 Initial Target States

Because the vast majority of southern India is already electrified, we initially looked to
northern India for potential users. Unfortunately, many areas of northern India are
currently experiencing violent social confrontations that would greatly weaken our
ability to establish a basis for a successful business. Also, many areas of northern
India are plagued by a poverty so deep that lighting is a trivial concern. As a result, the
states of Rajasthan and West Bengal (in west and east India respectively) were
chosen because of their relative social and economic stability. Though numerous
people in both of these states live on less than 2 USD per day, they still have some
disposable income or resources that they could use to purchase the light. Moreover,
both states have relatively good transport systems for distribution.

2. General Country Information

2.1 Physical Environment
India is full of geographic and climatic diversity, with mountains, plains, rainforests,
deserts, and coastal regions. This geographic diversity will provide a wide range of
environments in which to test the product.

Source: www.welcometoindia.com
Notable aspects of India's climate
Monsoons affect east and southwest India from June to October. Flooding is
common during these months. In these areas, photovoltaics would not be the
best source of energy; other options such as mechanical sources of energy
should be considered.
There is a great amount of humidity in India, particularly along the coast, and
73% of the country experiences a "medium" amount of rainfall. The product and
energy sources should be designed for a wet environment.
Many parts of India lie near fault lines. If the product is a stable, indoor light, it
should be set up in such a manner that it will not hurt people during an
earthquake.
In the arid areas of northwest India, the product should be able to with stand
temperatures over 100 degrees Fahrenheit.
Sources:
1. CIA. The CIA World Fact Book: India.
http://www.cia.gov/cia/publications/factbook/geos/in.html. 10 Feb. 2003
2. The Fix. Welcome to India. www.welcometoindia.com. 3 Feb. 2003
3. Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 7 Feb. 2003

2.2 Population / Population Distribution

India is home to 1 billion people. The most dense states are Delhi, Chandigrah,
Daman and Diu, Lakshwadeep, and Pondicherry.
On average, rural villages are home to 1500 people.

Source: http://www.censusindia.net/results/2001maps/gallery/map2.html
Sources:
1. The Fix. Welcome to India. www.welcometoindia.com. 3 Feb. 2003
2. Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 7 Feb. 2003
Transportation
On average, villages are only 2.5 km apart.
About 50% of roads are paved, depending on region.
Railways are the principle mode of transportation for both freight and
passengers; due to heavy demand by industries, the government is working to
improve the existing network.
Air India Limited is the major International carrier of the country (flies to US and
almost everywhere else). Indian Airlines is the major domestic air carrier of the
country. It operates 57 domestic stations and 17 international stations in Asia.
Sources:
1. Datanet India Pvt. Ltd. IndiaStat.com. www.indiastat.com. 7 Feb. 2003

2. The Fix. Welcome to India. www.welcometoindia.com. 3 Feb. 2003

3. Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 7 Feb. 2003

2.3 National Economy

India's economy is currently stable. Factors that could easily affect this stability,
however, include unsuccessful harvest seasons and natural disasters. Agriculture,
handicrafts, support services, and software services compose a large part of the
Indian economy. Growth in the manufacturing sector slowed in 2001.
General Statistics:
Debt Classification: less-indebted (World Bank, 2001)
Exchange rate: 48.336 rupees / US dollar
GDP growth: 5%
Inflation: 4% (World Bank, 2001)
Purchasing Power Parity: $2.5 trillion
Income Levels and Poverty:
With over a quarter of the world's poor concentrated in India, poverty is the
government's biggest priority.
Classified as a "low income" country by the World Bank with a GNI (gross
national income) of $450.
Great inequality in the distribution of wealth: the richest tenth of households hold
33% of wealth, while the poorest tenth only hold 3%
29% of the population lives below the poverty line; 70% of these people reside in
rural areas
86% of the population lives under $2 per day; 44% lives under $1 per day
25% of the population does not have enough money to eat adequately
Because of the high levels of poverty in the countryside, huge numbers of
migrants are flocking to the cities in search of a job and a better life. The cities
cannot support this swelling much longer, meaning that rural living must be
improved to retain people.
Sources:
1. CIA. The CIA World Fact Book: India.
http://www.cia.gov/cia/publications/factbook/geos/in.html. 10 Feb. 2003
2. Datanet India Pvt. Ltd. IndiaStat.com. www.indiastat.com. 7 Feb. 2003
3. Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 7 Feb. 2003
4. The World Bank. India Data Profile.
http://devdata.worldbank.org/external/CPProfile.asp?
SelectedCountry=IND&CCODE=IND&CNAME=India&PTYPE=CP. 7 Feb. 2003

2.4 National Government

The Indian government is a representative democracy, with a separation of
executive, legislative, and judicial powers. Elected in 1998, the prime minister is
Atal Bihari Vajpayee. The government is stable: there have been no major coups

since 1947.
Challenges we will face when implementing any business plan include cronyism,
and corruption within the regulatory bodies and judicial system. In 2002, the
international monitoring organization, Transparency International, rated the
corruption of the Indian government as 2.7 on a scale of 10, with 10 being the
least corrupt. Furthermore, government bureaucracy is extensive, and any
business faces numerous inspections from tax agencies and safety regulators. It
is important to note that the government shows preference to businesses with a
long history in India and to Indian-owed companies.
The government is a major employer in many areas of India due to little private
investment. It consumed 10% of India's GDP in 1996. It provides the majority of
investments in the science and technology sectors, particularly in the areas of
defense, nuclear science, space, and agriculture.
Sources:
1. CIA. The CIA World Fact Book: India.
http://www.cia.gov/cia/publications/factbook/geos/in.html. 10 Feb. 2003.
2. Transparency International Corruption Index. Transparency.org.
http://www.transparency.org/cpi/2002/cpi2002.en.html. 7 Feb. 2003.
3. IndianChild.com. http://www.indianchild.com/indian_economy.htm. 7 Feb. 2003.

2.5 Lighting, Electricity, and Energy

India has one of the world's largest programs for renewable energy. According to
Indian researchers, there is a huge untapped potential for renewable energy in India,
and they are working to achieve that full potential. New sources of energy have been
rapidly accepted by rural people.
Current available power sources in India include power grids, solar power, hydro
power, gasoline, and coal.
Access to Electricity
Electrical consumption per capita is 363 kWh (growing), compared to 11,822
kWh in the US. (all figures below: TERI, 2002)
80,000 villages are not connected to the grid; 18,000 of these are in remote
areas.
Though the government has "electrified" (meaning at least one house has grid
electricity) 85% of villages, only 37% of rural households have electricity. About
50% of households in urban slums have electricity.
Households in electrified villages do not tap into the electricity because it is too
unreliable or simply too expensive.
There are constant energy shortages and blackouts, due to a lack of power
plants, electricity being illegally stolen from the grid, and an 18% loss during
transmission and distribution caused by old technology (compared to 6% in US).
Costs of Lighting
The typical family spends 19 rupees on kerosene each month.(all figures below:
World Bank, 2002)
Poor households spend 4% of their income on lighting, while rich households
spend less than .5%.

Kerosene costs 2.5-5 Rs/ klm hour.

Incandescent bulbs cost 0.10/ klm hour.
Electricity is 20 times less expensive for lighting than kerosene (if kerosene is
used only for lighting).
Electricity costs 15.2 Rs/ month.
Indian government needs about $100 billion US dollars to meet power
requirements for the next 15 years.
Energy Sources
70-80 million rural households still depend on kerosene for their home lighting.
Though kerosene is noxious and gives off a lot of smoke, it is a great
improvement over fuelwood fires that are traditionally used.
Biomass is the use of cow dung for fuel. Cow dung smoke is toxic, but is often
used because it is free. Educated people tend to use petroleum-based fuel for all
their cooking rather than biomass. Non-smoking women in India exposed to
everyday biomass smoke had equally high death rates from chronic respiratory
diseases as male heavy smokers.
The government also uses vegetable waste (like coconut shells and sugar cane
stalks) as fuel for thermal-energy power plants. Efforts are being made to create
new species of plants that grow quickly and burn cleanly to be used as fuelwood.
To promote its use, the government provides a subsidy and provides a low
interest rate loan from the Indian Renewable Energy Development Agency
Limited (IREDA). The government currently uses education programs to promote
these new technologies of rural people.
With 300 sunny days and 5000 trillion KwH of solar radiation per year, solar
power is a very viable option in India. India is the world's third largest producer of
Photovoltaic modules (solar panels), and 75 companies are involved in the
production of solar cells, modules and systems. Over 600,000 solar PV systems
(about 40 MW) have been installed in India, making it the largest such
deployment in the developing world. In many parts of the country there are rural
energy co- operatives. Sagar Island in West Bengal will be electrified entirely on
solar energy by 2012.
India ranks fourth in the world for wind power capacity (1,025 MW), and there is
an estimated potential of about 20,000 MW of wind power. Furthermore, India
has its own turbine industry. To promote wind energy, the government is willing
to provide soft loans to both manufacturers and installers of wind farms.
Sources:
1. "Energy." India Information, Embassy of India 2000.
<http://www.indiaembassy.org/indiainfo/india_2000/chapters/chp22.pdf> 17 Feb.
2003
2. "Energy Strategies for Rural India: Evidence from Six States." Joint UNDP/
World Bank Energy Sector Management Assistance Programme. Aug. 2002
<http://www.worldbank.org/html/fpd/esmap/pdfs/258-02_intro.pdf> 2 March 2003
3. Malhorta, Preeti and Shandari, Preety. "Rural Energy Development in India."
TERI 2002

2.6 Current Government Energy Programs

The following are projects that demonstrate the Indian government's interest in
renewable energy technology for the power sector. Potential partnerships with current

government projects could be invaluable in easing the distribution and sale of LED
lighting systems providing insight into how to successfully reach the impoverished.
The Power for All Initiative:
Announced earlier this year by Prime Minister Vaipayee
By 2012, the government plans to connect all rural villages to power using
renewable energy technologies.
To help accomplish this task, a Ministry of Non-traditional Energy has been
created to coordinate renewable energy research.
The Renewable Energy Policy Act (currently before the Indian Parliament):
Goals include having a renewable energy capacity of 10,000 MW by 2012 and
providing electricity to 25% of non-electrified rural villages by 2012. If these
goals are achieved, a 11.6% power deficit will remain. It is believed that demand
will increase two to three fold over the next twenty years.
The government will provide incentives for research, development, and
demonstration of new technologies, market development, and laws prescribing a
minimum of renewable energy in each state.
Sources:
1. Prime Minister's Office. http://pmindia.nic.in/home.htm. 7 February 2003.

3. Composite User and Regional Information

Grain Harvest in Rajasthan

Source: http://biology.queensu.ca/~arnoldh/raj%20tilonia%20fields.jpg

Source: http://biology.queensu.ca/~arnoldh/raj%20woman%20in%20field.jpg

3.1 Composite User: Jyoti Mundra from Rajasthan, 42 years old

Jyoti lives in Bharatpur in the eastern part of Rajasthan. Most villages in her district
have electricity but hers does not. She is married, has 5 kids. Her 2 brothers died a
few years ago. She currently lives with her husband's mother, his mother's 2
unmarried sisters, her husband, his brother, her niece and nephew, and her own two
children. She has no concept of privacy or personal space; everyone in the family
knows each other's businesses.
Jyoti's family owns a camel which she rides to larger villages to get daily goods such
as soap and vegetables. Her family grows wheat, but the monsoon rains are a
constant source of worry. If the rains are too light, the harvest will be low and the dry
season will be hard for the family. She never went to school and is illiterate, but she
sends her kids to the government school, despite expensive fees. She lives in a mud
house with a thatched roof. Every day she walks an hour to get water from the well.
But in the dry season, the well dries up and she has to travel even further to get water.
She hopes her children will get good jobs in Jaipur. She would like to have a gas
stove. She spends 13 rupees on kerosene per month.
Insights
There is ample sunlight in Rajasthan, so PV cells would be useful.
Education is valued, so a light for reading may be desired.
People in Rajasthan enjoy watching TV, and thus would like to have electricity
for that purpose as well.
Environment in Rajasthan
Living Conditions

Months from October to February are very cold, while it is very hot between
March and September. The state gets very scant rainfall in the desert region.
During summer, people fetch water from miles away.
The western deserts accumulate about 100 mm (about 4 in) annually, while the
southeastern part of the state receives 650 mm (26 in) annually, most of which
falls from July through September during the monsoon season. (IndiaStat, 2003)
Pre-monsoon season, which extends from April to June, is the hottest season,
with temperatures ranging from 32 degree Celsius to 45 degree Celsius.
Rajasthan has suffered a drought for the last three years.
The poor receive a ration quota (2 kg. rice, plus pulses, sugar, salt, and oil) from
a Public Distribution System (PDS) shop and purchase other household
essentials at local market.
Infrastructure
Most roads in Rajasthan, are tarred; nevertheless potholes are common.
There are less than 3000 km of national highway (Mar. 96-97).
Most people travel by foot.
Wealthier people travel by auto-rickshaw and jeep.
Camels are often used in the western Rajasthani desert.
Electricity
There is a lack of adequate power supply. The most power that is ever available
is 2-3 hours/ day, usually at night. Furthermore, the timings of supply are
unknown; there is no uniformity in the supply of power. Due to erratic voltage,
sometimes even a single bulb does not glow.
People must wait a long time for new connection, sometimes as much as 10 to
15 years. This leads people to resort to theft.
90 percent of the villages in Rajasthan are connected to the power grid, but over
60 percent of the households do not have electricity.
Rajasthan is the first state to begin achieving the targets of solar rural
electrification.
The Union Ministry of Non-Conventional Energy Sources has allotted 5,000 solar
home lighting systems for rural areas in the state for the current financial year.
This is the highest target among all states.
A minimum of ten connections are allotted to a village or cluster of huts under
the Solar Rural Electrification Program. One solar panel is installed on the roof of
each beneficiary's house which is connected to battery. Two fixtures and
switches are installed in every house.
The system supplies electricity regularly for three to four hours daily. Even in the
absence of sunlight, the system can supply electricity for up to three to four
days.
Rajasthan has a 294.9 kWh per capita per year electricity consumption. This is
less than national average. (IndiaStat, 2003)
Rajasthan spends the lowest amount on energy compared to other Indian states
-- 13 Rs./month on kerosene, 16.9 Rs /month on electricity.
200 klm hours are used per capita each year (equivalent to one 60W
incandescent used one hour every-other day). (Indiastat, 2003)
Economic and Political Conditions in Rajasthan

Politics
Administratively, Rajasthan is further subdivided into 32 districts, which are
further sub-divided into tehsils and development blocks.
A panchayat is in charge of community governance and development.
Panchayats elections are regularly held and overseen by state election
commission.
Rajasthanis in 1997 received the right to all panchayat-related documents, and
in 2000 received the right to information in all spheres of governance with the
help of the NGO MKSS (Madzoor Kisan Shakti Sangathan).
Nearly all villagers vote, yet women, people from tribal areas, and the landless
have lower participation rates.
20-40% of villagers participate in PRI decision-making.
One commonly held belief is that you can only get benefits in a village if you are
associated with the sarpanch's (leader's) family. Corruption among sarpanchs is
rampant, and panchayat officials will not stop the corruption.
Since 1994, 33% of panchayatas were women. Yet, if women are elected the
sarpanchs, their husbands often have power instead.
Economics
Livestock breeding is the traditional subsistence strategy in western Rajasthan
and, in principle, well attuned to its natural resource base. It is an important
source of income for the poorer segments of the rural population with limited or
no land resources.
Minimum wage is Rs. 60/day.
79% of the population is rural.
37% of the rural population lives in poverty.
Mean annual household income: 34,551 rupees. ($735)
Social Structure in Rajasthan
Education
Illiteracy is high for men and even higher for women.
Children often leave school to aid their mother with household chores or to help
out in the fields.
Religion
Many people in Rajasthan are Hindu.
The caste system is adhered to.
Use of Light
Currently, women spend 2-6 hours and walk 4-8 km daily gathering firewood to
light their homes and to use for cooking. Many women have chronic back
problems from carrying a 10kg (~20 lb) load on their heads every day.
Candles and kerosene lamps are used at local temples,

The idea of putting light in the shops in the market may appeal to villagers
because they have to walk far to reach them at night. They might also appreciate
a torch for walking at night.
Receptiveness to Technology
Televisions are valued.
Aspirations
People always want to own more land.
Most parents would like to be able send both of their children to school and
would like for their children to have adequate time to study.
People want an irrigation system.
Parents hope that their daughters marry someone of the same caste or of a
higher caste.
Sources:
1. Center for Consumer Action Research and Training. http://cuts.org/cart-powerer-dev-abu.htm. 7 March 2003
2. Embassy of India, Washington D.C.
http://www.indianembassy.org/indiaingo/india_2000/chapters/chp17.pdf. 7 March
2003
3. The Hindu. http://hinduonnet.com/thehindu/2001/03/04/stories/1404221e.htm. 7
March 2003
4. IndiaStat.com. www.indiastat.com. 7 March 2003
5. IndiaTogeter.Org. http://www.indiatogether.org/govt/ocal/articles/arcrahasthan.htm. 7 March 2003
6. Pegu, Rink. The Week. "Packing a Punch." http://www.theweek.com/99nov21/events2.htm. 7 March 2003
7. Rajasthan Travel Tours. http://www.rajasthan-travel-tours.com/rajasthanclimate/. 7 March 2003
8. United Nations Development Programmme. "Chasing a Right."
http://www.undp.org/governance/docsaccess/chasing_a_right.pdf. 7 March 2003
9. Vetwork UK. http://www.vetwork.org.uk/ilsel.htm. 7 March 2003
10. The World Bank Group. "Poverty Net."
http://poverty.worldbank.org/library/view/10203. 7 March 2003

3.2 Composite User: Abhik Mittra from West Bengal, 48 years old
Abhik lives with his forty year old wife, Indra, in the village of Kandi, located in the
West Bengal state. The two have four children - three girls and one boy. The village in
which they live lacks electricity and other basic utilities. Abhik and his family live in a
semi-permanent thatched-roof house made of mud. It is supported by bamboo rods
and has a dirt floor, which Indra has a hard time keeping clean. Like the other
villagers, Abhik is a subsistence rice farmer who lives on a day-to-day basis. The little
money he does make he gets in spurts based on the harvest season.
Abhik is especially worried about money these days because he needs to pay his
daughters dowries. Abhik was fortunate enough to gather enough money to provide

dowry for his eldest daughter, age twenty, to marry a local farmer. Abhik still has two
other daughters, age nineteen and seventeen, for which he has to secure dowries.
Abhik also has one son, who is the youngest at age fourteen. Because he is their only
son, Abhik and Indra are trying hard to keep him in school for the longest period of
time that they can afford. Abhik and Indra were able to send their daughters to school
until age twelve, but they are hoping to keep their son in school for another year until
he turns fifteen. They are very proud of their childrens education, because they
themselves are both illiterate. They were unable to keep their daughters in school for a
longer period of time because they were needed at home to help with the household
and field work.
Abhiks mother also lives with the family. She is sixty-five years old. Her husband
(Abhiks father) died nine years ago. Besides their four children, Abhik and Indra also
had two other children who died at childbirth.
Indra spends a large portion of her time gathering wood for the cooking stove.
Because all her daughters will soon be married away, she will no longer have help
with this task. Since the village in which Indra and Abhik live is not connected to the
electrical grid, they must use kerosene for their lighting needs. Abhik spends about 37
rupees per month on kerosene, which is about 3% of his monthly income. He tries to
use it very sparingly, and he mainly uses it when he needs to fix his farming tools at
night. Lately, Abhik and Indra have also been very concerned about their water supply,
because there has been an outbreak of arsenic poisoning in the ground water.
Unfortunately, they do not have enough money to buy bottled water. As it is, they
barely have enough to eat.
Insights:
Most farmers get their income in large spurts depending on the harvest cycle.
Therefore, they will only have spending money at certain times of the year.
Environment in West Bengal
Location
West Bengal borders Bangladesh, Bhutan, and Nepal.
Population
West Bengal is home to 68 million people.
Three-fourths of these people live in rural areas.
The population density is 766 people per square km.
West Bengal's most populous cities are Calcutta, Howrah, and Haldia.
The Midnapore district has the highest population, while Calcutta has the highest
population density.
Houses tend to be further apart from each other in villages than is typical in
India.
Climate and Geography
West Bengal has a diverse geography, with the Himalyas in the north and plains in the

south. On the plains, the monsoon season runs from June to September bringing
floods and mudslides with it. Before monsoon season, this area is typically very dry.
The state provides a great range of temperatures and climates in which to test the
ruggedness of our product, with snow in the mountainous regions and hot, humid
summers in the southern region.
Living Conditions
People in rural West Bengal villages tend to live in mud thatched homes with dirt
floors.
About a third of households have electricity. Where electricity is unavailable,
people use kerosene, which costs 37 Rupees/ month (0.77USD).
Three-fourths of households have a safe drinking water supply.
While one-third of them have flush toilets, half of West Bengal households have
no toilet facilities at all.
Many rural villages are remote. Public transportation is available in West Bengal,
but it will only take one so far. Eventually, to reach most small villages, one will
have to do some lengthy walking.
Economic Conditions in West Bengal
The most common occupation is agriculture. Rice is a particularly profitable crop in
parts of the state. Many people also make crafts (jewelry, rugs, baskets) to sell on the
streets of cities.
A typical farmer's wage would be around 14,800 Rupees/ year (310 USD).
Social Structure in West Bengal
Family
One study showed that the ideal family size in West Bengal is 2 children;
however, the average family size is currently 4. This average is expected to
decrease over the next few decades. (International Institute for Population
Studies, 2001)
Many women work solely in the home tending to children and cooking. However,
women do sometimes work outside of the home if it is financially necessary. 29%
of West Bengal women work in addition to doing domestic chores, and 89% of
these women work for cash. (International Institute for Population Studies, 2001)
Health
The government successfully dispense general health information by radio. For
example, it was public announcements on family planning that has led to a
decrease in family size.
Many people are malnourished. 67% of women are anemic, and 48% of children
are underweight. (International Institute for Population Studies, 2001)
The infant mortality rate (under the age of 5) is 67.6%. (International Institute for
Population Studies, 2001)

Education
The literacy rate for females is 57%; meanwhile, 67% of males are literate.
(International Institute for Population Studies, 2001)
Schools are not available in all West Bengal villages.
Education is valued, but children must often leave school to help their families
earn money.
Religion
The majority of West Bengal residents are Hindu.
While the caste system is in effect in some areas, a tribal system divides people
in other areas.
There is a significant Muslim population, approximately 23% of state population.
Use of Light
Children, if they are in school, need light to do their homework.
Light can also be used to make crafts at night and therefore increase family
income.
People are generally open to outside technology.
Sources:
1. Dasgupta, Sourav and Sudeshna Dasgupta. "Bengal Web."
http://www.bengalweb.com/intro/wbengeo3.html. 9 March 2003
2. IndiaChild. "Indian Villages." http://www.indianchild.com/indian_villages.htm. 9
March 2003
3. Israel, Samuel ed. Crafts of West Bengal. Grantha Coporation: Middletown, New
Jersey, 1994.
4. National Family Health Survey, 1998-1999. International Institute for Population
Sciences: Mumbai, 2001
5. World Bank, 2001 http://www.rnw.nl/humanrights/html/09_march_1999.html

4. Business Context
4.1 Overarching Business Climate
India has a strong entrepreneurial climate. Almost all transactions take place on a
local level by small shopowners. People are willing to take risks if they have access to
the appropriate financing.
There are two types of ventures that foreign investors who want to do business in
India can undertake:
A joint venture in which they have a partner in India.
These are the most common--an Indian specialist would be aware of local
details that a foreigner may not know.

A completely foreign-owned company.

These are more difficult to maintain. It is also more likely that the investor will be
troubled by government bureaucracy.
It is in our best interest to do a joint venture.

4.2 Company Structure

Regardless of our company organization in India, we will need an international
structure that determines how our organization behaves.
If Light Up the World continued to perform the following core duties, it would be an
international financial organization that deals with suppliers and with its domestic
partners around the world:
1. Dealing with suppliers (LED manufacturers, raw materials providers, electrical
component manufacturers) to leverage buying in bulk
2. International financials: fundraising, assisting subsidiaries, diverting resources
from a successful venture to other projects in other countries as necessary.

Such a model makes Light Up The World a hub for materials, resources, and
information that all domestic subsidiaries can utilize when necessary. The amount of
support Light Up The World will provide its subsidiaries and the support these

subsidiaries will provide their regional departments is yet to be determined. However,

it is quite possible that the subsidiary will provide regional departments with technical,
financial, and market expertise and that the regional department will provide the
subsidiary with working knowledge of the people in that region and a labor force to
deploy the product. Ideally, the regional departments would also stimulate some form
of local microenterprise.

4.3 Manufacturing
It is unclear whether or not it would be beneficial to manufacture in India. While at first
India may seem to have a favorable manufacturing environment, the World Bank
notes numerous reasons why foreign investors sometimes shy away from India.
Benefits of manufacturing in India:
Manufacturing in India would allow us to integrate strong Indian R&D
development in energy storage, lighting, and alternate energy sources into our
project.
India's natural resources could be utilized.
There are potential government subsidies for manufacturing renewable energy
products.
Cheap labor (though potentially not as cheap as some other areas) exists in
India. A large portion of the labor force is also technically-trained and speaks
English.
Allows specialization of product development for Indian market.
Distribution would be faster and cheaper.
Drawbacks of manufacturing in India:
There are possibly cheaper manufacturing centers (because of labor costs) in
other countries. In 1999, Foreign Direct Investment made up .5% of India's GDP
compared to 4.1% in China. (all figures below: World Bank, 2002)
India has low labor productivity compared to other Asian developing countries,
even when India's cheaper labor costs are taken into mind
Businesses are subject to frequent visits by state officials. 15.9% of
management time is taken to deal with government officials on regulatory
administrative issues. This is compared to 11.4% in China, 4.3% in Latin
America, and 5.8% in OECD countries.
There are long delays at customs houses: India averages 10.3 days compared
to 7 days in Thailand
There is a poor supply of power. 45% of surveyed Indian firms had their own
generators, a figure which is very high by international standards
With an average interest cost of sales (per rupee) of 5.5%, Indian manufacturing
uncompetitive
India has a weaker communications infrastructure compared to other countries.
Internet hosts per 10,000 people: .2 India, .6 China, 40.9 Mexico.
Telephone mainlines per 1,000 people: 22 India, 70 China, 104 Mexico

4.4 Distribution
India has an extensive rail network, and a strong road infrastructure that is constantly
growing. Villages are short distances apart from one another. The government has
extensive distribution network in place. For locales near cities, there is a constant flow
of goods between the city and village. For more rural or remote areas, there is a

strong distribution network available through the existing structure established for
cooking fuels.
Possible Methods of Distribution:
We can sell our product directly to the government and allow them to distribute
via their established network. This allows us to focus on other concerns besides
distribution. However, there are a few disadvantages to this method. If there is a
shortage of units, available units will first go to friends of distributors. Also, this
method may take a while implement due to government bureaucracy.
We can establish a partnership in which our partner distributes our product for
us. This allows us to have a greater degree of control in where our product is
distributed through their network than we would have if we worked with the
government. However, extra expenses may be required to acquire the
partnership.
We can have a centralized sales force of traveling salesmen that travel around
the country selling our product. This gives us maximum control in distribution
because we direct salesmen where to go. However, it may be cumbersome and
costly to find and train a sales force.

4.5 Local Financing

There are a number of organizations that perform micro-financing in India. Partnering
with these established and reputable micro-lenders would probably be the easiest and
best way to create local financing for our project.
MFI's in India:
Asian Development Bank
Grameen Foundation

4.6 Micro-Enterprise
There is a strong entrepreneurial climate in India so working with local entrepreneurs
will not be a problem. Providing start-up capital and resources, such as training on
how to operate and run a profitable business, will be required of us, however.

4.7 Marketing
We are only in charge of marketing if we do a partnership or have a central sales
force; the government will do their own marketing.
Current Methods of Information Dispersal to Rural/Remote Villages
Radio
Word of Mouth
Television
Newspapers and Written Media
Written Signs

4.8 User-Business Relationship

Traditionally after the product is sold, few services are provided. Many people fix

things themselves or call someone they know for assistance. However, it would be
most useful to them if we provided the following continued services.
Installation and Training.
Maintenance/repair. This is a crucial service. Many other social ventures in rural
India have failed because they did not provide maintenance and repair of their
project.
Warranty. This might be what encourages our users to invest in our light.

4.9 Possibilities in Partnerships

Any successful business plan must create lasting, meaningful partnerships to
maximize the resources of existing organization.
Indian Government (State or National)
Various Electric Companies
Kerosene/Petroleum Companies
Indian Cricket Team/Bollywood Stars
Petroleum Conservation Research Association
Specific Potential Partners
Indian Renewable Energy Development Agency (IREDA)
Tata Energy Research Institute (TERI)
The Grameen Bank: offers microfinancing
Barefoot College (Rajasthan, India): trains local women in how to maintain and
service solar energy panels
Sources:
1.
2.
3.
4.

Indian Department for Industrial Promotion. http://dipp.nic.in/. 8 March 2003

Personal Interviews. Achal Garg
Personal Interviews. Akhil Gupta
Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 9 March 2003
5. World Bank, Confederation of Indian Industry. "Competitiveness of Indian
Manufacturing: Results from a Firm-Level Survey." January 2002.
http://lnweb18.worldbank.org/sar/sa.nsf/Attachments/wbcii/$File/FACSReport.pdf

5. Business Models
Based on the previous section's description of the business climate and our
understanding of our users, we have generated two business models that we feel
would be successful in India. In addition to the Crafts for Lights Model and the Light
Technician model, we will briefly assess the feasibility of numerous other models.

5.1 Overview of Business Model

Light Up the World (LUTW):
Light Up the World will determine the quality of the product and ensure that that quality

is maintained. They will also manage the international supply chain, negotiate
discounts from manufacturers/suppliers, and manage the direction of international
funds for new projects from established, already successful branches of the
organization.
India Headquarters:
The India Headquarters can be a branch created by LUTW or it can be a partner in
India. The regional headquarters would be responsible for manufacturing, distribution,
and marketing in India.
Manufacturing
As previously stated, more research is necessary to determine whether or not it would
be wise to manufacture our product in India.

5.2 Two Models Applied to India

Lights for Goods Model
By utilizing the skills of local artisans, we can promote local culture and generate
sufficient income through selling the local art on the international market.
Manufacturing
All lights will be manufactured and assembled in one location to ensure quality control.
Distribution
Our agents will directly distribute these lights to the craftspeople that will take the units
with them to distribute. Thus the selection process for our craftspeople and distribution
is accomplished at once. Since there will also be technicians to service these lights,
we could utilize the Maintenance Woman Model here
Assumptions
There are skilled craftspeople in every village.
Their products will sell, and enough people will buy them to make a profit.
LUTW will be able to staff someone who can manage these retail aspects of the
business or find an appropriate partner.
Strengths of the Lights for Goods Model in India
Many different people are able to gain a secondary source of income.
It celebrates local culture.
It does not necessarily involve government officials that would be corrupt.
It does not involve microfinance.
Weaknesses of the Lights for Goods Model in India

It will take a long while to get every aspect of this model started.
We must research how to determine what is art that would sell.
Shipping and storing the art may be problematic.
We must find a partner that would buy the art from us and sell it.
Light Technician Model
This model is both self-sufficient and can be incorporated into other models. The
servicing/maintenance aspect can be extracted and used independently of the
complete model below, which also incorporates sales and marketing for the
microenterprise.
Manufacturing
All lights will be manufactured and assembled in one location to ensure quality control
-- either at a factory or perhaps at a training school.
Distribution
For villages near urban centers, LUTW will ship ready-made lights to a central office in
the city and have the women come get it from us. For more remote villages, the units
will be shipped to the closest city and then sent to the villages by utilizing existing
cooking fuel distribution networks.
Assumptions:
Having a woman in this role will be culturally acceptable.
She will be able to make enough money from her services and selling lights to
sustain this as a full-time job.
Strengths:
Training in other electrical areas generates more wealth than from service of one
product.
Provides significant and extended wealth generation.
This sort of model is in place already in India.
Problem areas
There is limited application in urban areas.
This may require involvement of local government.
This may only work in regions with some capital and openness to large-scale
electrification and lighting systems
Each village will have to be approached individually, and will require significant
time to train her.

5.3 Key Assumptions/Deliverable Specifications

General Numbers
Income
Average person in India makes approximately $500 a year.
Estimated savings in kerosene per month due to one light: 20-40 rupees ($0.40$0.80).
Lighting Unit
LED (4 Per lamp) $1.00 / LED: $4
Fixture for lamp: $1
Cost of battery: $4
Estimated battery life: 1 year
Distribution/Manufacturing of battery: $1.00
Battery maintenance cost: $0.50 / year
PV System, $3/watt x 5 watts = $15
Cost to produce one unit: $25.50
Lights for Goods Model
Start-Up Investment
2 lights per person: $50.50
Supplies to start: $10
Training for sales force: $10 per person + salary
Training for maintenance: $10 per person
Micro-Enterprise Revenue
Average time involved to make one piece of art: 30
Our selling price to partners for such a piece of art: $60
Amount given to artist till investment recovered: $25
Amount to LUTW till investment recovered: $35
Time to recover initial investment: 2 pieces of art sold
Amount given to artist after investment recovered: $45
Amount to LUTW after investment recovered: $15
Maintenance Revenue
Electrical appliances needing repair a week: 10
Price per repair: $0.50
Total revenue per week: $5.00
Weeks to pay off training fees (Assuming $1.25/week payment): 8
This model hinges on us being able to dispose of all this artwork. The influx of artwork
makes the scalability of this model somewhat questionable. If we can create a market
for the artwork or sell it directly to resellers, we can quickly recover our investments.

Light Technician Model

It is important to note that though we are buying lights back at $15 per light, we can
reuse the LEDs, PV components, casing, and other functioning components. This will
be a great saving to us because all we need to do is replace the malfunctioning
components, and thereby create a light for even cheaper than the original $25 price.
Maintenance Revenue
Electrical appliances needing repair a week: 10
Price per repair: $0.50
Total revenue per week: $5.00
Weeks to pay off training fees (Assuming $1.25/week payment): 16
Micro-Enterprise Revenue
Total units bought per batch of sales: 10
Average size of a village: 1500 people
Average size of customer base: 300 people
Price charged per lamp: $8
Profit per light: $0.75
Profit per batch: $7.50
Miscellaneous Costs to LUTW from One Light Technician
Stipend for participating in light buy back program: $15 per light (after 5 years of
use)
Total cost per year to LUTW: 20 lights x $15 per light = $300
Stipend for batteries-for-books program: $2 per battery
Total cost per year to LUTW: 200 x $2 = $400
Total = $400 per year (first 5 years)
Total = $700 per year (after 5 years and the used lights come back to us)
Sources:
1.
2.
3.
4.

Indian Department for Industrial Promotion. http://dipp.nic.in/. 8 March 2003

Personal Interviews. Achal Garg
Personal Interviews. Akhil Gupta
Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 9 March 2003

6. Bibliography
Section 2: General Country Information
CIA. The CIA World Fact Book: India.
http://www.cia.gov/cia/publications/factbook/geos/in.html. 10 Feb. 2003
Datanet India Pvt. Ltd. IndiaStat.com. www.indiastat.com. 7 Feb. 2003

"Energy." India Information, Embassy of India 2000.

<http://www.indiaembassy.org/indiainfo/india_2000/chapters/chp22.pdf> 17 Feb.
2003
"Energy Strategies for Rural India: Evidence from Six States." Joint UNDP/
World Bank Energy Sector Management Assistance Programme. Aug. 2002
<http://www.worldbank.org/html/fpd/esmap/pdfs/258-02_intro.pdf> 2 March 2003
The Fix. Welcome to India. www.welcometoindia.com. 3 Feb. 2003
Malhorta, Preeti and Shandari, Preety. "Rural Energy Development in India."
TERI 2002
Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 7 Feb. 2003
The World Bank. India Data Profile.
http://devdata.worldbank.org/external/CPProfile.asp?
SelectedCountry=IND&CCODE=IND&CNAME=India&PTYPE=CP. 7 Feb. 2003

Section 3: Local User Demographics

Center for Consumer Action Research and Training. http://cuts.org/cart-powerer-dev-abu.htm. 7 March 2003
Dasgupta, Sourav and Sudeshna Dasgupta. "Bengal Web."
http://www.bengalweb.com/intro/wbengeo3.html. 9 March 2003
Embassy of India, Washington D.C.
http://www.indianembassy.org/indiaingo/india_2000/chapters/chp17.pdf. 7 March
2003
The Hindu. http://hinduonnet.com/thehindu/2001/03/04/stories/1404221e.htm. 7
March 2003
IndiaChild. "Indian Villages." http://www.indianchild.com/indian_villages.htm. 9
March 2003
Israel, Samuel ed. Crafts of West Bengal. Grantha Coporation: Middletown, New
Jersey, 1994.
IndiaStat.com. www.indiastat.com. 7 March 2003
IndiaTogeter.Org. http://www.indiatogether.org/govt/ocal/articles/arcrahasthan.htm. 7 March 2003
National Family Health Survey, 1998-1999. International Institute for Population
Sciences: Mumbai, 2001
Pegu, Rink. The Week. "Packing a Punch." http://www.theweek.com/99nov21/events2.htm. 7 March 2003
Rajasthan Travel Tours. http://www.rajasthan-travel-tours.com/rajasthanclimate/. 7 March 2003
United Nations Development Programmme. "Chasing a Right."
http://www.undp.org/governance/docsaccess/chasing_a_right.pdf. 7 March 2003
Vetwork UK. http://www.vetwork.org.uk/ilsel.htm. 7 March 2003
The World Bank Group. "Poverty Net."
http://poverty.worldbank.org/library/view/10203. 7 March 2003

Section 4: Business Context

Indian Department for Industrial Promotion. http://dipp.nic.in/. 8 March 2003
Personal Interviews. Achal Garg
Personal Interviews. Akhil Gupta
Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 9 March 2003

Section 5: Business Model

Indian Department for Industrial Promotion. http://dipp.nic.in/. 8 March 2003
Personal Interviews. Achal Garg
Personal Interviews. Akhil Gupta
Press and Information, Embassy of India. Embassy of India, Washington D.C.
www.indianembassy.org. 9 March 2003
Briefing Book Table of Contents