Why Invest in India

FASTEST GROWING ECONOMY

  • One of the FASTEST GROWING ECONOMIES IN THE WORLD, India has sustained recent global downturn and also emerged as one of the leading nations in terms of GDP growth rate and FDI inflows
  • India is likely to grow at consistently higher rates (>7%) and retain its position as one of the fastest growing economies till 2020 (Source: International Monetary Fund)
  • In recent years, India has emerged as one of the most attractive destinations not only for investments but also for doing business, evident by its significant jump by 12 places in Ease of Doing Business rankings between 2014 and 2015 (Source: Ease of Doing Business, World Bank)
  • India accounted for 1.7% of global merchandise exports in 2014, compared to 0.8% in early 2000. Exports have increased at a Compound Annual Growth Rate of 11.6% in FY 2010 to USD 310 billion in FY 2015 (Source: EXIM Bank Catalyzing India’s trade and investment, July 1, 2015; WTO International Trade Statistics 2015)
  • Foreign exchange reserves have been at a comfortable level over recent years. Currently, India’s reserves stand at USD 371.279 billion (Source: Reserve Bank of India as on 9th September, 2016)
  • India ranks amongst the top 10 FDI destinations globally – surpassing USD 50 billion in FY 2015-16. India has shown a growth of 46% in FDI equity inflow and 37% in overall FDI inflow since the launch of Make in India initiative (Source: Ministry of Commerce, Government of India)
  • India’s fiscal deficit stood at 3.9 % of GDP (USD 81.85 billion) in FY 2015-16 and envisaged to come down to 3.5% of GDP by the end of FY 2016-17 (Source: https://data.gov.in/)

DEMOGRAPHIC ADVANTAGE

  • With 356 million 10-24 year-olds, India has the world’s largest youth population (Source: UNFPA, The Power of 1.8 billion, 2014)
  • The proportion of working age population in India is likely to reach more than 64% by 2021, with a large number of young persons in the 20-35 age group (Source: Economic Survey 2014)
  • The average age of 125 billion persons will be 29 years by 2020 (Source: Economic Survey, 2014)
  • If India continues its recent growth trend, average household incomes will triple over the next two decades and it will become the world’s fifth largest consumer economy by the year 2025 (Source: The Bird of Gold, McKinsey Report)
  • India is expected to be the largest supplier of university graduates in the world by 2020 (Source: Morgan Stanley Research)
  • India has 712 university level institutions, 36,671 colleges along with 11,445 standalone institutions (Source: Educational Statistics at a Glance 2014, Ministry of Human Resources Development)

FAVOURABLE POLICIES

  • Major FDI policy reforms have been made in a number of sectors, such as defense, construction development, pensions, broadcasting, pharmaceutical and civil aviation
  • Foreign investors can invest in India either on their own or as a joint venture, as may be required in a few sectors
  • Barring a few reserved sectors, 100% FDI is allowed through the automatic route in several sectors, without the need of government approval, namely Automobile, Food Processing, Construction etc.
  • In the Union budget 2016-17, the government has emphasized the need to increase manufacturing as a percentage of GDP
  • The Central and State governments have sector specific policies, incentives and subsidies to promote manufacturing
  • Increased allocation in the budget to improve infrastructure, which is critical in facilitating future growth

DEVELOPING INFRASTRUCTURE

  • Sagarmala Project: 
    The project includes modernization of ports, setting up of coastal economic zones, new major ports and fish harbors
    Capital outlay of USD 10 billion (Ministry of Shipping)
  • SMART Cities Mission: 
    Developing 100 smart cities as satellite towns of larger cities and by modernizing existing cities.
    Capital outlay of USD 15 billion
  • AMRUT: 
    In an effort to recast urban landscape and make urban centers more livable and inclusive.
    Capital outlay of USD 7.69 billion
  • Roads & Highways: 
    Development of about 7000 km of national highways under Bharatmala Pariyojana.
    Capital outlay of USD 12 billion
  • Railways: 
    Dedicated freight corridor for decongesting existing network.
    Capital outlay of USD 12.3 billion
  • Strategic location: 
    India’s 7500 km coastline has 12 major ports, over 200 minor parts and is strategically located on world trade routes.
  • Some of the emerging and established markets such as Middle-East and South East Asian countries are closely located
    • India is surrounded by the Bay of Bengal, the Arabian Sea and the Indian Ocean, an arrangement that facilitates most its overseas trade in all main directions

SUPPORTING GOVERNMENT STRUCTURE

  • World’s largest democracy – India is a Sovereign Socialist Secular Democratic Republic with a Parliamentary form of government, which is federal in structure with unitary features
  • India’s robust legal and political systems ensure long-term political stability
  • The Indian political system is supported by Executive, Legislative and Judicial branches. Every major branch is independent of one another
  • Independent financial institutions for business:
    • The Reserve Bank of India (RBI) has played a critical role in maintaining the economic stability in India despite the global economic scenario. The focus on containing inflation and ensuring that interest rate cuts are passed on by banks, is a revolutionary step and structural reform in itself. RBI has been increasing access to foreign exchange reserves, and moderating periods of extreme volatility in the currency through exchange intervention.
    • Securities Exchange Board of India (SEBI) has been the regulator of Indian markets since it was granted legal status in 1992. Among other functions, one of SEBI’s prime objectives is ensuring the rights and safety of investors. India achieved a rank of 8 in World Bank’s Ease of Doing Business Ranking – protecting minority investors, highlighting the efficiency of the organization.
    • The Competition Commission of India (CCI) is responsible for enforcing The Competition Act across India. Their objective is to play an overarching role as a market regulator across all sectors with focus on anti-competitive behaviour of enterprises that may distort competition.