Investment Opportunities in India

July 30, 2010

Foreign investment in India gets a booster from IMF and Deloitte reports

Filed under: Business Opportunities,Investment Opportunities — Harjeet @ 12:50 PM

Foreign investment in India is expected to receive a boost from investors including non-resident Indians (NRIs), on the back of the encouraging Deloitte Touche Tohmatsu and the US Council on Competitiveness combined report titled, “2010 Global Manufacturing Competitiveness Index”. The report has ranked India second only to China globally and followed by South Korea. India is said to be gaining and getting a better foothold on the same over the next five years too. The factors being allocated for stronger performances are India’s rich talent pool of scientists, researchers, engineers and its large, well-educated English-speaking workforce and democratic regime make it an attractive destination for manufacturers. Already, robust industrial output augmented by a good performance by manufacturing, especially the capital and consumer goods sectors, has put up a double-digit growth figure of 11.5 per cent in May 2010.

The International Monetary Fund report on India’s US$ 1.2 trillion economy too has raised the sentiment on investing into India. The IMF report has added credence owing to being a report generated by an independent agency monitoring the growth of the Indian economy. The positive figures of achieving 9.4 per cent growth in calendar year 2010 has indeed boosted the investor sentiment.

NRI investments in India are as it is on the rise owing to better job security in the Gulf, the euro market crisis and better returns in Indian equity markets. Investment advisors are asking prospective investors to include India in their investment portfolios, backed by visible strengths in the Indian markets.

Many stocks that have received NRI investment interest in the past few months have been Uttam Galva Steel, Ackruti City, Zensar Technologies, majors such as Larsen & Toubro etc. Several industry and market experts feel that over the past few years, there has been a noticeable increase in the confidence in India and the Indian economy with respect to the NRIs. Most of the NRIs believe that India is the safest bet and NRIs in the Gulf are now diverting most savings to India. The NRI inflows have continued to be strong.

Foreign exchange reserves too showed a positive trend and were up to US$ 278.267 billion for the week ending July 2 by US$ 1.287 billion, on the back of revaluation gains and the increase in the value of gold reserves.

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July 5, 2010

Indian economy gets a boost from new investment reforms

Encouraging indicators in the Indian economy in the form of advanced tax collection and industrial production at 17.6 per cent in the month of March 2010 have brought enough cheer to investors investing in India. According to the Union Finance Minister of India, Mr Pranab Mukherjee, these factors are propelling the economy in the right direction. Owing to the euro zone financial turmoil and better job security in the Gulf, investors too are returning to India and better monsoon and strong production output mean the growth story in India would continue to attract investments.

Exports have risen by 35 per cent to US$ 16.1 billion, on increasing demand in the western economies. Better conducive environments prevail now in the states such as Karnataka, Kerala, etc., which have created industry friendly environs for doing business in India. The states are now implementing new industrial policies, revised IT policies too. Business Investment opportunities have opened up in sectors such as infrastructure, power, etc., which have helped in boosting the economy in the northward direction.

Overseas investors are now being guided through online facilitation platforms as OIFC, which engages in providing facilitation advice through an expert panel on queries related to investment opportunities and doing business in India. The refurbished foreign direct investment policy with updations scheduled on a regular basis by the government too is a step in this direction.

Tax reforms and incentives such as direct tax code (DTC), higher float in indices for free trading etc are initiatives that are expected to bolster more investments into the thrust sectors. The doors have opened to international trade with signing of free trade agreements (FTAs) with economies such as Finland and income tax agreements to avoid double taxation. The government has also set up two income tax overseas units (ITOUs) within Indian Missions in Singapore and Mauritius. Eight more such units have further been approved in USA, UK, Netherlands, Japan, Cyprus, Germany, France and UAE. These will facilitate smooth garnering of taxation revenues without hindrances and tax evasions in cross-border transactions.

The growth trend is substantiated with the report data that has come out recently. The Centre of Monitoring Indian Economy (CMIE) in its report stated that it expects industrial production to grow by a buoyant 9.2 per cent in 2010-11. The growth would come on top of a 10.4 per cent growth in industrial production, as measured by the Index of Industrial Production (IIP) in 2009-10, CMIE said.

These factors are hence expected to help retain continuity in investment in prime sectors.

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