invest in india a investment guide by kakaji.com

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Key Reasons : why India is a great place to invest ? 1. YOU NEVER HAD IT SO GOOD 2. INCREDIBLE SKILLS ON OFFER 3. HIGHLY COMPETITIVE ENTREPRENEURSHIP 4. GREAT MACRO-ECONOMIC SHOW 5. EASY INDUSTRIAL LICENSING POLICY 6. MAJOR FINANCIAL SECTOR REFORMS 7. TRADE POLICY RATIONALIZATION 8. A PROACTIVE FDI POLICY 9. GREAT INFRASTRUCTURE, AND A HELPING HAND 10. BOOMING SECTORS & OPPORTUNITIES GALORE
the key reasons why India is a great place to invest, how the nation has liberalised norms for foreign investors, and what is on offer for foreign investors. 1. YOU NEVER HAD IT SO GOOD: * India is the 4th largest economy, in terms of purchasing power parity. Tenth most industrialised economy. * Strong macro-economic performance. * Political stability and broad consensus on reforms. Liberal and transparent foreign investment regime. * Well developed banking system. Vibrant capital market. National Stock Exchange third largest, Bombay Stock Exchange fifth largest in terms of number of trades. * Strong and independent judicial * Among the highest rates of returns on investment. Profitability of US investments in India: 19.33% in 2000 (according to US Department of Commerce). 2. INCREDIBLE SKILLS ON OFFER: Strong pool of scientific and technical manpower. Prowess of IITs, IIMs well known. 255 Fortune 500 companies getting services. 2nd largest English-speaking population. Abundant, high-quality, cost-effective, competitive manpower. Over 100,000 IT professionals added each year. India rated as the most attractive destination for offshore business processing by global consultancy A T Kearney. IT Industry $14 billion; growing at 50% p.a. Exports $12 billion; 2008 exports target: $60 billion, to be 35% of India's total exports. Job creation: a million direct & 2-3 million indirect. 3. HIGHLY COMPETITIVE ENTREPRENEURSHIP: * Prevalence of foreign technology licensing - Rank 1 in the world. * Availability of scientist and engineers - Rank 2. * Quality of management schools - Rank 9. * Firm level innovation - Rank 12. * Firm level technology absorption - Rank 16. * Company spending on R&D - Rank 32. (Source: Global Competitiveness Report, 2003) * India amongst the leading entrepreneurial hotbeds globally. (Red Herring clubs India with Israel) 4. GREAT MACRO-ECONOMIC SHOW: * India among world's fastest growing economies. * Average GDP (gross domestic product) growth of 5.4% during the 9th Five-Year Plan (1997-2002). * Exports registered growth of over 19% in 2002-03. * Foreign exchange reserves at an all-time high of over $90 billion. * Increase in forex during the fiscal year in 2002-03: $20 billion. * India's economic growth is sustained. * The nation's GDP is expected to grow by over 7.0 % this year. 5. EASY INDUSTRIAL LICENSING POLICY: Under the Industries (Development & Regulation) Act, 1951, industrial license is needed only for items: * Falling under the list of compulsory licensing. Reserved for small-scale sector. If location attracts restriction. * All industries exempt from industrial licensing required to file an Industrial Entrepreneur Memorandum. * No approval is required; Only notification need. Industries retained under compulsory licensing under the Industrial (D&R) Act, 1951: * Distillation and brewing of alcoholic drinks. * Cigars and cigarettes of tobacco and manufactured tobacco substitutes. * Electronic aerospace and defence equipment. * Industrial explosives; Hazardous chemicals. 6. MAJOR FINANCIAL SECTOR REFORMS: * Setting up of the Competition Commission; Amendments to Companies Act, Fiscal Responsibilities, and Securitisation Act for creditors' security. * Board for Industrial & Financial Reconstruction to be repealed. Computerisation of Customs interface. * Stable tax regime. Only 3 rates of indirect tax. Trade facilitation measures introduced. * Foreign Exchange Management Act, 1999 provides a liberal regime; forex procedures eased. * Stocks can be sold on the without prior approval. * Profits, dividends and capital investment can be repatriated. * Royalties can be paid by wholly owned arms to parent companies. 7. TRADE POLICY RATIONALISATION : * Trade policy liberalised. Most items on Open General License. * Policies fully compatible with WTO. * Functioning of the Director General Foreign Trade (DGFT) computerized: * All 33 locations are Web-enabled. * 70% of the total transactions of exporters/importers are Web-enabled. * Transaction time has reduced to just 6 hours. * On-line banking fully integrated. 8. A PROACTIVE FDI POLICY: FDI under ‘Automatic Route,’ except in areas: * Attracting compulsory licensing; or for acquisition of shares in an existing company. * Sectors not open to FDI. (Gambling, lottery, et cetera.) * Investor can bring automatic route cases for Foreign Investment Promotion Board approval. * Foreign technology collaborations freely allowed under automatic and government approval routes. India FDI Outlook * India rated best destination for outsourcing and 6th most attractive destination for FDI, according to AT Kearney. * Global competitive report ranks India at first place in terms of prevalence of foreign technology licensing. * Among top 10 tourist destinations. Major destination for foreign venture capital funds. Pie chart, left bottom, shows country-wise FDI inflows. 9. GREAT INFRASTRUCTURE, AND A HELPING HAND: * $12 billion Highways Development Programme. Over 13,000 Kms of Highways being developed. * The Electricity Act, 2003 in place to facilitate reforms in power sector. Permits trading in electricity, captive generation freed from prior approval. * Upgradation of airports at New Delhi and Mumbai. * ‘Sagar Mala,’ a major programme aimed at developing ports and shipping sector at an estimated investment of $22 billion. * Major advances in telecommunications sector. Bandwidths of terabit available. Sharp decline in telecommunications costs. * Foreign Investment Implementation Authority helps solve foreign investors' problems. It meets periodically with investors to sort out operational difficulties and facilitates implementation. * An Empowered Sub-Committee of the National Development Council set up on creating an investor friendly climate and removing regulatory barriers to investments. * Modernisation of legislations on intellectual property. All IPR Laws are TRIPS compliant. Intellectual Property Appellate Tribunal functional. * Simplification and re-engineering of work procedures. 10. BOOMING SECTORS & OPPORTUNITIES GALORE: * Roads: Capacity enhancement of highways. 7000 kms of National Highways being offered during the current year. Many more opportunities in the States. Opportunities for equipment manufacturers. technical support. * Urban Infrastructure: Development of townships for the rapidly growing, increasingly affluent urban middle class. City level infrastructure. roads, bridges, IT Parks, sanitation and water supply, etc. Consultancy in urban planning. * Ports: Government of India's initiative of developing ports – ‘Sagar Mala' with an investment of $22 billion. Development of Ports. Shipping. Upgradation and operation of cruise terminal. Operation of Dry Port at Mumbai. * Power: Addition of 100,000 MW required over the next 10 years. Installed capacity 106,000 MW. Hydro-electric initiative to develop 50,000 MW. Detailed project reports to be prepared to facilitate private investment. * Telecommunications: Cellular phones increasing @ 1.5 million every month. To increase by 20 million this year. Figure to rise to 100 million in the next 3-4 years. Telephone connections to rise to 75 million by 2005 and 175 million by 2010. Investment Opportunities. Setting up manufacturing base. Value-added services.

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