Investment Opportunities in India

July 23, 2012

Growing Healthcare Market in India

India is one of the most profitable healthcare markets globally. The sector is one of the largest and rapidly-growing sectors in India, in terms of revenue and employment. The Indian healthcare sector comprises the sub-sectors of hospitals, medical infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health insurance and medical equipment.

The main challenge is to deliver affordable health care services to India’s billion-plus population. This signifies enormous opportunities for the medical community and other service providers in India. The leading factors supporting the growth of the industry are- prevalence of various diseases, rising urbanization, untapped market, increasing life expectancy, and active private sector participation. The healthcare in India is controlled mostly by major foreign companies. The foreign companies have subsidiaries in the country, mainly because of the availability of cheap and skilled labor.

The Indian healthcare sector is a rapidly-growing sector with high potential for future growth, both in urban and rural India. In the year 2011, the sector was sized at US$ 50 billion as it employs a total of 4.5 million people directly and indirectly within India. The sector is poised to grow to US$ 100 billion by the year 2015 and further to US$ 275.6 billion by 2020, according to the estimates by ratings agency Fitch.

FDI in Hospitals and Manufacture of Medical and Surgical Appliances

The economic reforms launched by the government from 1991 onwards have resulted in significant economic growth and the integration of India into the global economy. With the opening up of the Indian capital markets to Foreign Institutional Investors, the foreign direct investment regime too has been increasingly liberalised.

The health care industry in India has been witnessing a potential upsurge for the past few years especially in the hospitals and manufacturing of medical and surgical appliances.

The total inflow of FDI in India in the hospitals and diagnostics sector was US$ 1 billion from April 2000–April 2011, according to Department for Industrial Policy and Promotion (DIPP), which is responsible for formulating the FDI policy in the country.

FDI inflows to medical and surgical appliances are estimated to be around US$ 20.5 million. Medical and Surgical Appliances is Rs 981.7 million industry with a share of 10.59 percent in the global market.

Some of the government initiatives boosting Indian healthcare sector are:

There have been a number of initiatives taken up by the Government of India for the enhancement of healthcare sector in the country. Some of them are:

100 per cent foreign direct investment is permitted for health and medical services under the automatic route.

The National Rural Health Mission had allocated US$ 10.15 billion for the up gradation and capacity enhancement of healthcare facilities. The aim of NRHM is to provide facilities of quality healthcare in India.

In March 2010, the government allocated an additional US$ 1.2 billion for six upcoming AIIMS-like institutes and upgradation of 13 existing government medical colleges in order to meet revised cost of construction.

June 14, 2012

FDI is a source of Indian Economic Growth

India is developing into an open-market economy. It is the fourth preferred destination for foreign investment just after the United States, China and Britain. India attracted overseas investment of US $8.1 billion in March, the highest ever monthly inflows. Cumulative FDI inflows for the fiscal 2011-12 amounted to US $36.50 billion.

The Indian economy has continuously recorded high growth rates and become an attractive destination for investment. Government offers various facilities to non-Indian resident to attract foreign investment in India. The factors that attract investment in India are stable economic policies, availability of cheap and quality human resources, and new unexplored markets. The government has taken various initiatives like – allowing foreign education providers to set up campuses in India, FDI in limited liability partnership firms, etc.

Impact of FDI on Indian economy

Foreign direct investment in India has enabled the country to attain a certain degree of financial stability and economic growth with the help of investments in different sectors. After liberalization of trade policies in India, there has been a positive GDP growth rate in country’s economy.

Foreign investment in India helps in developing the economy by generating employment, generating revenues in the form of tax and incomes, development of infrastructure, backward and forward linkages to the domestic firms for the requirements of raw materials, tools, business infrastructure, etc.

How to make FDI in India

Foreign direct investment in India is permitted in the form of financial collaborations, joint ventures, technical collaborations, capital markets and private placements.

Foreign investors are free to invest in India except few areas. There are some activities and sectors which require prior approval of Reserve Bank of India (RBI) or Foreign Investment Promotion Board (FIPB) for e.g. manufacture of cigarettes and tobacco, manufacture of electronic aerospace and defence equipments, manufacture of items exclusively reserved for small scale sector with more than 24 per cent overseas investment and all other proposals falling outside notified sectoral policy.

The foreign investors can invest in India in two ways:

Incorporation of an Indian company: The foreign investor can set up a separate legal entity in India under the provisions of the Companies Act, 1956. The foreign investors can invest in such Indian company up to 100 per cent of capital based on sectoral guidelines specified by the Government of India.

Unincorporated entity: A foreign company can operate in India, by establishing a Branch Office of the other place of business (foreign entity), subject to conditions and activities permitted under the Foreign Exchange Management Regulations.

Who can invest in India?

A non-resident of India (other than a citizen of Pakistan or an entity incorporated in Pakistan) can invest in India, subject to the FDI Policy under automatic or government route plans.

Qualified financial Investors (QFIs) are permitted to invest through SEBI registered Depository Participants only in the equity shares of listed Indian companies through recognised stock exchanges in India under various SEBI guidelines.

Foreign institutional investors are allowed to invest in the capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs can acquire shares or debentures of Indian companies with the help of stock exchanges in India.

May 8, 2012

The Better Part of Foreign Investment in India

In the last few years India has witnessed a major change in its economic environment, on the back of foreign investments into India. The huge foreign capital investments have bought India considerable financial benefit. Markets are expanding in India, trade policies are being liberalized and there had been further development in technology and telecommunication as well. After China, India is now growing in popularity with a huge amount of foreign capital coming in. Foreign investors are putting in money in fields like telecommunication, infrastructure, computer hardware and software, information technology and hospitality.

Investors from abroad have been providing huge financial help to companies, corporations, business and organizations and here lies the significance of foreign direct investments (FDI) in India. India is growing in opportunities because of huge foreign investment. There are some automatic routes for making the investment and one can even invest through several processes undertaken by the Government. One can go for several joint ventures if one wants to be an effective direct foreign investor. One can really make a favorable fortune if one invests in sectors like real estate education, biotechnology, alternative energy sectors and other specialized fields.

With the route of foreign investments into India, companies can start a new venture and at the same time opt for business expansion. Thus, this is a better way to start and grow big at the same time. There are several advantages of a direct foreign investment in India. Wages in India are cheap and this is the reason more number of people would want to start here.

There are special investment privileges being offered at the place and this is the reason the concept of FDI in India is gaining immense popularity. Moreover, the investors would get a tariff-free access to the Indian markets and this is a real advantage for them. The investors can even enjoy tax exemptions at the place and this is the reason investors would want to put in money at the place more than once.

When talking about foreign investments into India one may focus on other aspects as well. With the entry of huge capital, there are industries in India which have been breathing fresh lease of life. They were at the verge of being extinct and due to the efforts of some foreign investors they have gained life once again. In fact, the legal aspects in India are quite flexible for foreign investors to operate and this is the reason it has been possible for people to make a fortune in this part of the world. Moreover, as India is rich in human resource, so starting anything new seldom faces hindrance over here. Therefore, with right training and correct infrastructure India will continue to be a favorite to the investors involved in legitimate investments.

The Scope of Foreign Direct Investment in India

The foreign direct investment into India is a process for facilitating people to invest in India. If you are really interested in doing business in India with the help of foreign capital then make sure that you are investing in the right source and you can do this in a number of ways. Even when India was going through tough times, it was still a good financial breeding ground for all foreign investors. They have never felt the pressure as their genre of investment has always been unleashed for the purpose of ushering more capital within the country.

There have been several Indian infrastructures who may have suffered in the field of production and manufacturing due to lack of essential capital. However, a good way for them to survive is by offering FDI equity to companies or individuals who would be interested in making huge capital investments.

Foreign direct investment in India is done in several ways. Investment can take place through effective financial collaborations. In this case the common interest is the yearly financial turn over and to make this work out two or more companies come in association and they share much in contributing towards a common financial consensus. The effort has to be there from both the ends, from the part of the investor and also from the part of the collaborator. When collaborating, you can keep the leadership factors aside and think about a healthy togetherness contributing towards a bigger financial platform.

As a way towards FDI equity is also a joint venture and a technical collaboration. Once the company delivers the plan of taking things technically ahead then other can contribute in a different way. It is more technical and less of financial collaboration.

Foreign direct investment in India is not permissible in all industrial sectors as it is not allowed in the domain of arms and ammunition. You cannot invest in the field of atomic energy. You cannot invest anything related to railway and transport and you cannot even put your money in the field of coal and lignite. It is even not permissible to invest money in matters of metal mining. Thus, keeping aside these domains you still have a huge scope for investment.

April 9, 2012

The Promising Healthcare Industry in India

The healthcare industry in India is growing fast. This is happening as people are becoming more conscious about diseases and ailments. The healthcare industry is gaining more attention this is because more number of Indians is becoming health conscious each day. They want their health to stay in proper condition and this is the reason they have plans to invest in this sector. With a lift in the economic status of the country and frequent rural development is ushering in more health consciousness. People in the village level now know the real meaning of a safe and disease free existence and this is the reason they are opting for more healthcare benefits.

It is also important for you to know about FDI in healthcare in India. This will give you a proper idea about how to make safe investments in the health care genre. A proper investment in the field will help entrepreneurs deal with health related affairs previous the healthcare genre in India was not quite promising. This mainly happened due to the lack of proper technical support. The private equity has helped in making things appear spectacular and promising in the genre. In the sector the Initial Public Offerings too had a great role to play.

Now life is more prone to accidents and illnesses. There is in fact no guarantee to life. You live with the fear to dike at any moment. Thus, as a support to your health and existence you really have to plan for big. Thus, it would be good to opt for a health insurance policy. Such a policy can be of immense help to you especially when you fall sick suddenly and you do not have enough cash in hand to suffice for your treatment. This is the point when healthcare industry in India comes to rescue and you are made to invest in a good health insurance policy. Thus, in case you are tremendously sick and you need cash immediately a proper healthcare policy would just be apt for you.

People are trying to know more about FDI in healthcare in India. This is a kind of field where you can really invest money in order to secure all healthcare needs. For instance, giants like AGI are at present collaborating with the TATA group to make things look more promising. Aviva, Bajaj Alliance al, are trying to bring more people to the circle. This circle is becoming bigger each day as more and more people are investing after health and well being.

The healthcare industry in India is thriving with scopes and opportunities each day. Medicine or pharmaceutical is also a significant part of the healthcare industry. The costs of medicines are increasing each day and this is the reason you must arrange for an external source which can indeed help you in health rejuvenation. As a part of the healthcare program a huge section of the population are becoming prone to therapeutic treatments. These treatments too are highly beneficial and curative and they can surely help you have the best health status.

February 20, 2012

Foreign Direct Investment in India – Boosting Economy and Foreign Exchange

The investment strategies for the coming years is all set to differ from the customary and common way, offered by the investors and financial planners in the present time. The investment settings have changed greatly. Till recently, you could invest in stocks and bonds to have a secure income for the future. This is the traditional strategy for investment advised by most investors. With stock funds being a risky investment and bond funds the safer one, investing half in each of them were considered to be the right way of investing. However, the year 2012 is not going to be a good one for investing in bonds and stock fund anymore, as it is more of a risk than an investment.

The reason being the slow recovery of the economy of USA and the weak economy has put a lot of pressure on the stock funds and stock markets. The low interest rates are an indication that those who have savings cannot get a proper interest income, even in safe investments. The best investment strategies include investing in stock funds should be to go along with growth and income funds that have invested in high class companies.

According to the survey conducted, the foreign direct investment in India is the highest, next only to China. After the severe recession in USA, India has taken over as the second most key destination for foreign direct investment by transnational companies from last year. USA has slipped to the fourth position as a destination for FDI. There are various reasons for multinational companies opening their offices in India. India has got a vast market and its economy is also growing very fast. Also the policy of the Indian Government towards FDI has gone a long way in attracting foreign direct investment in India.

India had a restraining policy towards FDI for a long time, which resulted in less number of companies showing an interest in investing in the Indian market. The scene has changed since 1991 with the liberalization policy of the Indian Government and from then on till now, they are making every effort to woo foreign investment by easing their policies. This has resulted in many foreign companies showing interest in the Indian market. Some of the investment strategies of companies include widening its jurisdiction of work beyond their country, which brings a lot of profit to them. This is the case of the MNC’s who are settled in India.

Other than the foreign direct investment in India, the market competition, the labor market competitiveness and the highly stable economy have influenced the foreign companies to invest here. The benefits that developing countries like India get from foreign MNCs investing here include lessening the technology gap, the natural resources are utilized in the best way, the foreign exchange gap is lessened, can begin a greater level of investment and enhancing the fundamental economic structure. The global FDI is all set to rise to USD 1.6-2.0 trillion in 2012.

December 26, 2011

Great Investment Options for NRIs for Making Great Profits

If you are an NRI, it is natural that you would like to invest in some of the best agencies, so that the future returns on it are huge. There are several investment options for NRIs currently, but OIFC proves to be the best. Special facilities are often offered to the Non-resident Indian because it is one of the best promotion agencies for investment in India, especially in Gujarat. The investment types available with this organization are many, and therefore, you can carefully and wisely select from them. However, there are some special considerations that you would have to make while making an investment here.

As there are different investment types under this sector, the choice of the type would largely depend on the amount of money that you want to invest and the amount of risk that you are willing to take. Being an NRI, you can always invest in the Indian Stock Market through mutual funds or directly through the equity market. There are Corporate Fixed Deposits, Monthly Income Plans, and even Fixed Maturity Plans. Periodic investments are also a good option in that case. However, if you are absolutely confused in making the right decision, the best thing that you can do in this context is to take the suggestion of the experts in this context.

India being a land of opportunities, you would not have dearth of investment options for NRIs. You would just have to take wise and careful steps, so that you end up making the best deals. The investment options along with this line are generally long term strategies. At different periods of time, you would be able to get different beneficial features with these investment options that can certainly work great for you. However, you can always assess the market and the risk factors involved in such forms of investments, so that after a long time the profit that you earn is visible.

In addition to that, if you want to make a real estate investment, carrying out the transaction through OIFC can be wise. It is believed that carrying out transaction can be often a cumbersome task, because there are several laws and rules in accordance with transaction of property. However, if you take a closed guidance of the OIFC rules, you would definitely be able to carry out investment safely and wisely. In addition to that, you would also have to keep in mind several foreign exchange regulations in relation to acquisitions and transfer.

When you want to make a real estate investment, you should also be aware of the fact that you would be able to invest in shares of companies that are associated with the development of township, or construction development projects. You can also acquire any immovable property within India apart from the agricultural property, farmhouses and plantation properties. If required, being an NRI, you would also be able to transfer these properties to any resident of India. You would also be able to transfer the property to another non-resident Indian, as well. Therefore, there are huge investment opportunities available here for you.

Growing Investment Opportunities in India

India is a huge capital market, and therefore, investment opportunities in India are also available. India is basically a mature capital market, and the free economy of the country is actually backed by different investment options. Therefore, while investing, a person has to consider his needs for investment and the amount that he can invest. As there are different options for investment India, he can easily determine the ideal solution in accordance with the requirements. Well, in the growing industrial sectors of the country, it is expected that there would be an increase in the growth rate to about 9.95 percent during the period of 2013-2015.

Under the Foreign Direct Investment in India, the economy of the country would be backed by structural reforms, demographic dividend and also the impact of globalization. These factors would certainly work as a great source of catalyst and consequently, showcase the other different opportunities of investment that are present in India. The high industrial growth along with increased rate of private investments is certainly the crucial factors that can create an expansion of the Indian economy. This in turn, might result in bigger opportunities of investment.

In fact, this fact certainly cannot be denied that the investment opportunities in the country have mainly resulted in the growth of different industrial sectors. In short, it can largely be said that growth and investment are interrelated and only with a growth in different sectors there has been a growth in the investment sectors. This is certainly a great opportunities for the investors in India to find out new levels of investment. In fact, it was also claimed by the planning commission of India that the opportunities of investment, especially in the sector of infrastructure would be very much close to the US target of more than $500 billion.

By 2012, investment India, especially in the field of medical tourism can largely witness a growth. This is again the resultant impact of the growth of the economy. From three years in a row, there has been a growth in the Indian economy by almost about 9 percent, and greater growth is always a sign of greater opportunities for investment. Apart from Indian investors, there are also scopes of investment for the overseas investors, especially in relation to the Foreign Trade Policy. This is the reason for which various export policy measures are being adapted, so that different labor intensive segments can be covered within these, and this in turn, can pave the way for bigger investment.

The policy of Foreign Direct Investment in India is constantly being reviewed, and liberalization measures are also being taken. Changes in different equity caps are also being taken into consideration, and the policy announcements are also being frequently taken into consideration. With regards to all these, it can largely be concluded that irrespective of the ups and downs of the economy, if the policies are constantly being reviewed, it would definitely prove to be a boon for the different investors in India and abroad. This in turn, would surely create a great and a positive impact on the economy, as a whole.

April 13, 2011

Investment in Infrastructure in India

Though there are excellent opportunities for investment in infrastructure, major investment concentration is seen in sectors such as roads and highways, ports and airports, railways and power. Infrastructure in India is gaining in importance and a number of public private partnerships (PPPs), targeted at US$150 billion, is receiving support from the government. India needed huge investment and the private sector has a major role to play on its own as also in association with the government.

New avenues for foreign investment
Several avenues have been opened up flow of foreign investment in the infrastructure sector. SEBI-approved mutual funds have been allowed to accept subscription by foreign institutional investors to help boost overseas investment in Indian companies including those engaged in infrastructure projects. FII ceiling on investment in infrastructure bonds has been raised to $25 billion from $5 billion and the overall limit for corporate bonds to $40 billion. FIIs can also invest in unlisted bonds with a minimum lock-in period of three years.

The Indian market offers a good deal to investors who can gainfully use their expertise in these sectors. The Indian Government is seeking investment in infrastructure from both local and domestic capital. To encourage FDI in infrastructure in India, the government is allowing 100% FDI in a large number of sectors. Even in those sectors where prior approval is required, it requires only between 6 and 8 weeks to get clearance.

Investment in infrastructure to be doubled
The Indian Prime minister Dr. Manmohan Singh wants investment in infrastructure to be doubled to about $1,000 billion during the 12th Five Year Plan ending 2017 and has advised the Finance Ministry and the Planning Commission to draw a plan of action for achieving this level of investment.

The optimism arises from the impressive performance by the telecom sector.

Concern areas in infrastructure is said to be power deficit and the aggregate losses of around 30%, causes mainly because of technical and commercial faults are worrisome. Other concern areas are low capacity addition in the port sector, a huge investment backlog in railways and low penetration of broadband services.

23% increase in infrastructure projects
In this year’s Union Budget the Indian Finance Minister has projected an increase in infrastructure projects by another 23%. There has already been a considerable hike in Government focus on investment in infrastructure. This further thrust is likely to give a tremendous boost to this sector.

As per reports of the mid-term appraisal (MTA) of the Eleventh plan (2007-12) private sector investment in infrastructure has risen in the last few years. This has encouraged the government to go on an overdrive regarding infrastructure creation.

It is expected that the private sector will contribute at least half of the over $1 trillion dollar (Rs 40.99 lakh crore) investment planned in infrastructure in the 12th plan (2012-17).

March 23, 2011

Investment Guide For the Overseas Indians

Bidding adieu to the global recession and a rather unaffected economy of Asian markets especially India. The repetitive revision of India’s gross domestic product (GDP) by various organisation’s including World Bank reflected the confidence in the Indian economy and its prospects to sustain the country’s growth. The robust growth of the Indian economy also becomes evident from the influx of the foreign direct investment (FDI). India has been declared one of the most preferred destinations for the FDI inflows. Investment opportunities in India are plentiful. It becomes evident with the numerous MNC’s not only trailing their products and services into the Indian markets but also coming forward to set up their manufacturing units in India. This form of investment strategy is mainly to curb the expenses and to harness the potentials of the large consumer base and the boosting middle class income. It provides greater scope for various business investments.

With the West business and industry giants, foraying into India with customised products for the Indian consumer in order to tap the investment opportunities in India. The Government of India is trying to accommodate and utilise the conducive investment climate of the country by relaxing and even introducing new policies. The change in the Indian Government is to strategise and attract foreign investments into the country especially from the perspective of the overseas Indians or the non resident Indians (NRI). Various banks are working on providing investment strategies and investment guidance to the prospective overseas Indians/ investors to make the most fruitful deals.

With the global market trend on a rise, on back of developing countries robust economic growth, investing in India has emerged as a trendsetter phenomenon. Business in India is booming with the high demand – supply curve on a rise. The investment advisors globally are projecting the potentials of investing in India.

It is important for investors to have some trend analysis of investment scope before they plan to start or set up a business in India, thus the role of investment advisors to prepare extensive investment guides to help and direct the trade investments and the scope of foraying into a particular business in India becomes crucial.

Improved and targeted guidance for the Overseas Indians to invest in India has helped in registering a surge along with the initiation of globalisation and liberalisation. According to a survey World Investment Prospects Survey 2010-2012 conducted by United Nations Conference on Trade and Development (UNCTAD), India is the second most important FDI destination for transnational corporations during 2010-2012.
The highly attractive sectors for the private equity (PE) investors are the infrastructure development, education and sustainable development sectors among others. It is evident from the huge number of projects being taken in the infrastructure sector through the public private partnership (PPP) mode. It would not be an exaggeration to conclude that the successful implementation of the numerous infrastructure related projects form a backbone for the various parts of the country to develop. Thus, substantiating the importance and relevance of detailed yet crisp investment strategies and guide for the Overseas Indians.

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