~ .---..------------... --.-.---------..

---
Andrew N. Liveris The Dew Chemical Company
ChaIrman am! (;t1lf;1E~ecl1liveOf/Ice' 2030 Dow Cent!:r
Midland. M,ctllgan 48674-2030
989- 636-4147
FAX 989 - 638-9468

October 1, 2008

Mr. Chidambaram
Finance Minister
Government of India
A.No.134, North block
Fax - 011 23093289
Email-fm@finance.nlc.in

Dear Honorable Minister:

Subject: Dow's growth Initiatives and challenges in India

As a follow-up to discussions with the Prime Minister in New York, I am writing to you to seek your urgent
action in support of a positive investment climate for Dow India's stated projects as well as to highlight to you
my company's commitment to growth as a local investor in India.

As you know, Dow Chemical International Pvt. ltd. (DCIPl I Dow India) has recently announced initiatives to
double its investment in India to approximately As- 1000 crores ($250 million) within the next year. These
investments are primarily focused on bringing new and innovative technologies to market in India, which will
in-turn grow downstream industries and jobs to further diversify the Indian economy. Dew India already has
nearly 1000 high-skilled employees and operations in seven .Iocations across the country.
Dow India has also substantially increased our presence in Indian society through multiple Corporate Social
Responsibility (CSA) activities, including funding the Jaipur foot initiative, providing water systems in
Gujarat, and contributing to the Bihar relief effort and infrastructure development (schools, etc.) in Pune. We
will continue to partner with communities to further enhance the quality of life around Dow India's areas of
operations. Unfortunately, even with such success, we are facing barriers for our two largest investments to
date: the Dew India research center in Pune and Dow Europe's joint venture with GACl in Dahej.

These are two investments that the government publicly endorsed, but that now face barriers due to lack of
consistent application of government support:

The Fle,B~'ch. BfJ.d,_Deve/opment Centre In Pune was formally announced by the Honorable Chief
Minister, Shri' Vilasrao 'Deshmukh in October 2007, and has been under construction on 100 acres 01
industriar"lar;d- allotted by. the MIDC in Pune. This global research and innovation center will conduct
fundamental, high-skilled research as well as application development in renewable and conservation of
energy, water and allied areas. We have already hired over 180 scientists, and anticipate 400 additional
hires once construction is completed. This project has faced many delays over the past six months and has
been vandalized on multiple occasions. This week the state Government again stopped the construction,
announcing a second committee to evaluate the project. We are cooperating with the Government of
Maharashtra, but urge that this review be completed within the 30-day time/ine, and that construction be
allowed to continue at the site simultaneously. The potential implications of continued costly disruptions and
-
government bureaucratic barriers when companies halle complied with local laws and regulations and
-
committedto be an active communitycontributor are potentially devastating examples of lack of support
for foreign investors.

/:>,.

~ '~7::13\'~~i~~~1."'"
,..-
"9\;';~"'6'!.M
Page Two
October " 2008

.I
GACUDow Europe joint venture in Dahej. In April2008, an MOU was signed between the two parties to
set up Chloromethane production lacility in Gujarat. The proposed investment was announced by
Honorable Chief Minister of Gujarat, Shri Narender Modi, and would rely on the use 01 Dow's advanced
chloromethane manufacturing technolpgy. The innovative technologies Irom Dow Europe that willbe used
in this project willenable improved industrial competitiveness and compliance with the Montreal Protocol for
environmental emissions. The downstream markets that willbenefillrom these technologies are the rapidly
growing pharmaceutical intermediates and the electronics segments. However, the Chemical Ministry has
reportedly sent a communication to the FIPB confirming the value of the technology, but recommending a
delay in the project. That message contradicts eartier discussions, before signing the MOU, when Dow India
had met with the Ministry 01 Chemicals and Fertilizers, and was advised. that the Govemment would
welcome this investment. The business has chosen to pull its application and willwork with GAGL and then
approach the FIPB with a revised proposal. Again, clarity from the government, and specilically the Ministry
of Chemicals and Fertilizers, is needed in support 01 Dow India's investment plans. Specifically, we also
need confidence that this application willbe approved based on the merits of the application.

Ultimately, it is critical that the Government of India speaks with one voice on issues 01 foreign direct
investment and sustained domestic economic growth. We value your direct assistance in ensuring that all
Ministries operate on the basis of the messages we have received from the Prime Minister himself that
welcome the opportunities for cooperation, partnership and contribution to India's domestic economy with
high-skilled job creation as well as commitment of problem-solving technologies and funding lor social needs
of local communities.

-
As said at the beginning of my tetter we remain committed to exploring further investment in India but need
your support and actions to resolve these issues. We look for tangible evidence of government action in the
next 30 days. f look forward to meeting you at the upcoming CEO Forum in New York, NY, to discuss next
steps in support of an open, transparent and welcoming investment climate in India.

Sincerely yours,

Andrew Liveris
~l
"
Chairman and Chief Executive Officer
The Dow Chemical Company

~"
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,) ,,"
\~' C<'"
CC: Dr. Montek Singh Ahluwalia, Vice Chairman, Planning Commission
Dr. Ramesh Ramachandran, President, Dow India
,»
~~::'~:::i~=~r

l
~
--------.-.--..-------- ".
Andrew N. Llverls The Oow Chemical Company
Ghctl[man and Chilli Executive OfficeI 2030 Dow Center
Midland. Mic/"dgan 48674.2030
989- 636-4147
FAX 989 - 638-9468

October 1, 2008

Mr. Kamal Nath

Minister of Commerce & Industry
Government of India
Udyog Bhawan
-
New Delhi 110011
-
Fax 011 . 23062223/947
Email -cim@nic.in

Dear Honorable Minister:

Subject: Dow's growth initiatives and challenges in India

As a follow-up to discussions with the Prime Minister in New York, I am writing to you to seek your urgent
action in support of a positive investment climate for Dow India's stated projects as well as to highlight to you
my company's commitment to growth as a local investor in India.

As you know, Dow Chemicallntemational Pvt. Ltd. (DCIPl/ Dow India) has recently announced initiatives to
double its investment in India to approximately Rs. 1000 crores ($250 million) within the next year, These
investments are primarily focused on bringing new and innovative technologies to market in India, which will
in-turn grow downstream industries and jobs to further diversify the Indian economy. Dow India already has
nearly 1000 high-skilled employees and operations in seven locations across the country-

Dow India has also substantially increased our presence in Indian society through multiple Corporate Social
Responsibility (CSR) activities, including funding the Jaipur fool initiative, providing water systems in
GuJarat, and contributing to the Bihar relief effort and infrastructure development (schools, etc.) in Pune. We
will continue fo partner wilh communities to further enhance the quality of life around Dow India's areas 01
operations. Unfortunately. even with such success, we are facing barriers for our two largest investments to
date: the Dew India research center in Pune and Dow Europe's joint venlure with GACl in Dahej.

These are two investments that the government publicly endorsed, but that now face barriers due to lack of,
consistent application:'of govel'J"tmentsupport: .

The Reullrch snd Development Centre in Pune was formally announced by the Honorable Chief
Minister, Shri Vilasrao Deshmukh in October 2007, and has been under construction on 100 acres of
industrial land allotted by the MIDC in Pune. This global research and innovation center will conduct
fundamental, high-skilled research as well as application development in renewable and conservation 01
energy. water and allied areas. We have already hired over 180 scientists, and anticipate 400 addilional
hires once construction is completed, This project has laced many delays over the past six months and ~as
been vandalized on multiple occasions. This week the state Government again stopped the construction,
announcing a second committee to evaluate the project. We are cooperating with the Government 01
Maharashtra, but urge that this review be completed within the 30-day timeline, and that construction be
allowed to continue at the site simultaneously. The potential implications of continued cosily disruptions and
-
governmentbureaucraticbarriers when companies have complied with local laws and regulations and
committed to be an active community contributor - are potentially devastating examples of lack of support
for foreign investors.

~0
~,
.~

<;4",
<:
.~;,"',:,";"
.

_,:,1
.~.'.\

.
.{Jti;-'.
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I

Page Two
October 1, 2008

J
GACUDow Europe joint venture in Dahej. In April2008, an MOU was signed between the two parties to
set up Chloromethane production facility in Gujarat. The proposed investment was announced by
Honorable Chief Minister of Gujarat, Shri Narender Modi, and would rely on the use of Dow's advanced
chloromethane manufacturing technology. The innovative technologies from Dow Europe that willbe used
in this project willenable improved industrial competitiveness and compliance with the Montreal Protocol for
environmental emissions. The downstream markets that willbenefit from these technologies are the rapidly
growing pharmaceuticaJ intermediates and the electronics segments. However, the Chemical Ministry has
reportedly sent a communication to the FIPB confirming the value of the technology, but recommending a
delay in the project. That message contradicts eartier discussions, before signing the MOU, when Dow India
had met with the Ministry of Chemicals and Fertilizers, and was advised that the Govemment would
welcome this investment. The business has chosen to pull its application and willwork with GAGL and then
approach the FJPB with a revised proposal. Again, clarity from the government, and specifically the Ministry
of Chemicals and Fertilizers, is needed in support of Dow India's investment plans. Specifically, we also
need confidence that this application willbe approved based on the merits of the application.

Ultimately, it is critical that the Government of India speaks with one voice on issues of foreign direct
investment and sustained domestic economic growth. We value your direct assistance in ensuring that all
Ministries operate on the basis of the messages we have received from the Prime Minister himself that
welcome the opportunities for cooperation, partnership and contribution to India's domestic economy with
high-skilled job creation as well as commitment of problem-solving technologies and funding for social needs
of local communities.

As said at the beginning of my letter - we remain committed to exploring further investment in India but need
your support and actions to resolve these issues. We look for tangible evidence of government action in the
next 30 days. I look forward to meeting you at the upcoming CEO Forum in New York, NY, to discuss next
steps in support of an open, transparent and welcoming investment climate in India.

Sincerely yours,

Andrew Livens "

Chairman and Chief Executive Officer
The Dow Chemical Company

CC: Dr. Montek Singh Ahluwalia, Vice Chairman, Planning Commission

Dr. Ramesh Ramachandran, President, Dow India

I ,
 r'

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Squi!"";dMail Page 1 0[2

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Message List I .Del~tc prev.i'p~_s I Next

Forward I Forward as At.tachr:nent IReply I Reply Af~,
Sub.ject: Dow India: Request for an appointment
From: "Chitkara, Rakesh (K)" <RChitkara@dow.com>
Date: Fri, October 3,2008 12:08 pm
To: tka.nair@pmo.nic.in
Priority: Normal
'yj~w FyJlli_~d.~ I Y~w Priru~Ne_YJ~[~i9.!l1AddJo Addre~!!.IJ!!9kI View as HTMI.,
Options: J3JQcICS_~lldet:
B.to~k.s~Rd~f~$ Domain

~nri T K A Nair,
Principal Secretary to Prime Minister,
Prime Minister's Office, Government of India,
South Block, New Delhi - 110011

Subject: Mr. Andrew Liveris's meeting with Honorable Prime Minister in

New York

Dear Mr. Nair,

As you are aware that Mr. Andrew Liveris, CEO, The Dow Chemical Company
had an opportunity to meet Prime Minister during his recent visit to New
York. Mr. Liveris discussed the challenges being faced by Dow India in
our recent projects in Maharashtra and Gujarat. Mr. Liveris has also
written to Mr. P Chidambaram and Mr. Kamal Nath early this week. I am
enclosing the copies of both letters for your reference.

I would request for a~ appointment with you for Dr. Ramesh Ramachandran,
President, Dow India ~nd Y to update the current situation at any
I
ronvenient time and date. We seek your intervention to get the
solution of both the issues.

Kind regards, , , \...

Truly yours,
~ ,,,"-<.5V

Rakesh Chitkara
Director - Corporate Affairs
Dow Chemical International Pvt Limited
G Block, Raheja Towers, 2nd floor,
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Bandra-Kurla Complex, Bandra(E) , ;jf', , ;"

Mumbai - 400 051 INDIA ,,' ,-'
Tel: 91 22 6783 2311 (Dir) ", ,.. '-, ,:""
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Fdx:91 22 26525691 "

Mobile: 91 9820159634
Email ID - c;om
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