India — emerging as a global Investment Hotspot
“Sometimes even to live is an act of courage.” Those words are as true today as when they were written two millennia ago by the Roman Stoic philosopher, Seneca. Even though there have been a few financial crises and economic debacles in the past, there certainly hasn’t been such an inter-connected market leading to complex causes and effects to deal with in the recorded history.
The coronavirus pandemic is affecting millions, shattering social structures and disrupting economies and markets. Even though we survived the economic crisis and the financial crash of 2008, the world is diving into a deep recession yet again. However, the year 2020 downturn is likely to be far greater than the crisis in 2008.
Despite the crisis, as businesses revamp their 2021 investment budgets, India will appeal to foreign investors. Time and again, Indian has proved itself as the perfect investment destination for global partners to expand their businesses.
Why is India preferred over other countries?
With market opening up coupled with policy measures, India is on the path of recovery, and in the post-COVID world, it is destined to be the hub for economic activities. A few key factors that make India a preferred option for investment include:
1. A large labour force in India is the best advantage as a nation. Relatively lower wage rates and a skilled workforce gives it the edge over other nations to work with.
2. A politically stable government at the helm gives another crucial advantage for the country to move ahead with policies and reforms which are in the favor of doing business and attracting foreign capital
3. Large land availability can’t be ruled out in a country where manufacturing units haven’t realized their true potential as yet.
4. A determining factor and one that has historically troubled India before is the stability of the Rupee in the context of foreign markets. This stabilization has resulted in better foreign exchange buffers and helped lower financial stress.
5. Last, but not least, is the spending capacity and the demand generation in India. Growing by the day, it has increased by a whopping 100% over the last 10 years.
While the overall market potential of India will always be high, given the large population, many other factors like ease of doing business, land, labour laws, tax rates, availability of talent, logistics, and political stability also play important role in attracting FDI to any country.
Key sectoral opportunities have also presented to favour India emerging as a preferred nation
- One of the biggest consumers of Smartphones and Electronic appliances with subscribers of telecom now reaching 1.2 billion and is set to grow even further in terms of consumption.
- Opening up of locally produced Defense equipment and liberalization attracts more capital in the economy.
- A nascent market for Electric vehicle mobility and battery manufacturing and impetus to produce all this in India itself.
- An upcoming hub for medical research and development in the international markets, post-Covid is an opportunity that global players will not want to miss out on.
Even in uncertain times, sectors such as the services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals, and pharmaceuticals have attracted the maximum amount of investment in the year 2020.
Opportunities Galore in India’s Backyard
For India, the future seems positive and foreseeable growth is imminent. With policy announcements, stimulus packages and a lot of sentiment uptick, India’s domestic market has gotten under the Government’s radar for opportunities.
- Private Capital has entered the coal mining and space sectors and further recommendations have come in for key sectors in the near future.
- Agricultural reforms to remove controls in nationwide markets and bettering market prices for commodities helping stabilize the sector.
- An efficient and competitive energy sector is in the preparations for minimized electricity losses in transmission with better infrastructure.
- Boosted spending in the healthcare services by private and public spending with an aim of providing affordable healthcare for all.
- Spearheading defence and aviation capabilities through local manufacturing and research is an exciting venture that has alluded to the nation in the past for lack of capital, infrastructure, and expertise.
India — a land full of opportunities
With the right mindset of the government, India has emerged as the most sought-after destination for foreign investments. We believe, the economic crisis that set in due to Covid-19 could spur reforms that would completely turn around the country. These reforms can propel the economy for progressive growth, thus, creating gainful employment for 90 million workers in India by 2030. Single window clearances across industries have enabled potential investors to locate lucrative lands from their distant offices and finalize them without having to visit the offices of land-owning agencies. Devising a friendly tax structure that imposes less tax burden on foreign entities, introducing smooth processes for the inflow of FDI along with the ease of doing business, the government of India has opened up various routes for foreign investments to come in.
In addition, the government introduced certain amendments to remove the red tape so that more FDI is subject to the automatic approval route. Hence, owing to these steps, India is poised to rise as an attractive FDI destination in the coming times.
It is hence safe to summarize that India is the best place to invest in and now is the time to harvest great returns in the future.
