Reasons to Invest in India
India is one of the fastest growing economies in the world today, India has sustained recent global downturn and also emerged as one of the leading nations in terms of GDP growth rate and FDI inflows. Economists predict that by 2020, India will be the third largest economy in the world. Indian markets have immense potential and offer prospects of high profitability and a favorable regulatory regime to attract investors. Further, with the new initiatives like Make in India, Ease Of Doing Business In India, Digital India, Startup India, Smart Cities, etc. the Indian Government further intends to attract the Non Residents to make financial investment in India. The ambitious ‘Make in India’ campaign launched on 25th September 2014 aims at turning the country into a global manufacturing hub by eliminating the unnecessary regulations and time bound project clearances. Some of the key answers to the question “Why Make In India?” are as follows:
⇒ Large presence of FIIs in the Indian capital market with over 451 FIIs and 38 foreign brokers registered with SEBI.
⇒ Placed amongst the most transparent & mature markets in the world.
⇒ The world’s third largest investor base only after U.S.A and Japan.
Government of India has emphasized on the importance of ‘Ease of Doing Business’ and it is a major pillar of ‘Make in India’ initiative. It is working extensively on improving India’s rank in the World Bank Group’s Doing Business Study.
Also in a presentation in Hong Kong by CLSA’s Chris Wood, who is recognized as the one of the best strategists in Asian markets. During his speech, Wood maintained that India has been and continues to be his favorite market in the region. Following is the extract from his speech:
I have, in fact, allocated 41 percent of my long only portfolio to India… I am not going to pull out because I am viewing India as a five-year story given the fact that Modi has been elected for five years. Modi is the most pro-business, pro-investment political leader in the world today.
The above mentioned factors contributed to the fact that India best destination to invest right now and the world has its eye on India.
Further, the Government of India has permitted foreign investment in almost all sectors with a few exceptions, for instance in sectors such as atomic energy, lottery business, etc. where FDI is completely prohibited. For other sectors, FDI is either 100% permitted or partially permitted. In the permitted sectors, subject to sectoral caps, FDI may be via 2 routes:
- Automatic route or
- Government route i.e. where prior approval of Government of India is required.