Investment Opportunities in India

October 31, 2011

Growing Economic Standards Leading to Greater investment options in India

The scope for business in India is immense and this has led to more investment options in India, The high population density in the country has given rise to great opportunities in the field of business guarded by a range of developed skill set. Thus India has grown as one of the significant economies in the world having immense potential towards long-term growth. Based on this investment strategies for India can be well formulated.

During the last couple of years the economic growth rate in India was around 7% p.a, before it was hit by situations like credit crunch, recession prevailing round the globe. The growing up economy has attracted bulk of investors to go ahead with investing in India. The growth has been backed by the various industrial sectors to a great extent. The sectors mainly include technology, manufacturing and service industry. The country is yet to grow its economy and the eminent business analysts believe that very soon the country will join the league of the top economies around the world.

One of the major threats for the government of India in going ahead with the growing economy is nothing other than the diversified wealth distribution in the region under which a favourable part of the population enjoy higher income and a luxurious living and at the same time another half of the population just survive on just a few dimes and are highly poverty stricken. Unless this inequality in wealth distribution and the situation of poverty could be eliminated, the economic growth will continue getting struck at the mid level.

The political history of India has continued to remain controversial and difficult for time immortal but it is with the introduction of new economic policies back in the year 1990 , changes in economy could be traced . It is from this time around the free economy policies came into being eliminating the socialist policies and principles of the by gone years. This has even created new investment options in India for overseas Indians and even the domestic investors. Thus a new era in terms of business, economy and investment began in the country.

There are scores of companies across the world having immense exposure to India. Some of them are connected through partnership while the others have full control through the domestic companies. The main consequence to this was getting easy exposure through collective investment strategies, direct equities, exchange traded funds and several others. Although, it is always better to have professional advice along with this at all time. Each of these investment vehicles comes with its own set of risk/reward ratio and in order to undertake the risk one must align the particular risk to their own risk profile, investment strategies and financial needs for future.

As huge potential has been forecasted about the growth of the Indian economy, so it is high time now that India must go ahead towards the fulfilment of its own potential and increase Investing in India from Overseas Indians. As more market will open up for the overseas and domestic investors in India, the economy is gaining more transparency with reduced rate of risk profile.

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October 19, 2011

Protocols and Etiquettes to be Maintained While Continuing Business in India

India is a country with lots of diversity and hence while doing business in India, it is bit tough to draw a conclusion at an earlier stage and due to this it is very difficult to have some set rules in order to go ahead. The first steps to pursue business in India involve consideration of certain factors very strongly and this includes the language, cultural aspects, religion, and caste system to a great extent. A businessman needs to bring changes in the approach, etiquette and behaviour based on the situation and the one to be addressed at the other end.

The business centres in India are constituted mostly by the metros like Delhi, Kolkata, Mumbai, Bangalore, Hyderabad and so on. And hence a particular socio economic class has thrived in these cities. Here are the few clues to guide one through the cultural aspects and business etiquettes to be pursued in these regions. The tips will indeed add momentum to one’s decision to make business investments in India and exploring newer investment opportunities in the country of diversification.

India has many states and each of them bear scores of languages and dialects and among them some are referred as official languages. Although Hindi is the principal official language but the other languages should also be paid considerable respect. Alongside, English is also the language of great importance while pursuing international trade and commerce.

If someone has strong desire towards gaining good deal of profit in lieu of investment opportunities in India then the cultural aspects should be strongly bore in mind. They play the key role in defining the business culture prevailing in the country, in this context the element that needs to be pointed out is the hierarchy level as the entire infrastructure of the Indian society stands on the framework called hierarchy and it is maintained very strictly. This on the contrary keeps the status and role of people at par with the social order.

There are several instances proving the fact, such that a clerk won’t provide any manual labour as it is the responsibility of a ‘runner’ or a ‘peon’. Therefore if there is a requirement as meagre as moving a desk might take hours when a peon is engaged as no one will be open for doing the task as it is a general idea that has thrived in the country for years now that all work is not meant for everyone.

If the ordeal is meeting someone then it is very important to remember the etiquette to be followed during the meeting. In India, “Namste” is the most preferable gesture; this is a sign that resemble the Indian culture very closely. It is done by joining palms and bringing it near the chest marked by bowing down a little. Along with that, a handshake also marks a warm gesture.

One should also be aware of the surnames bearing Indian origin. The surnames say a lot, with them the caste, religion and even some traits of the individual can be judged.

If favourable business investments have been made then please stress on the given points in order to have a successful business in India.

  • Always address everyone with appropriate title.
  • If business card is being exchanged then at one side the information can be printed in Hindi or the regional language.
  • Always be positive in projecting your sense of honour and trustworthiness.
  • If meetings are necessary then they should be arranged well in advance and should be confirmed over phone or in writing.
  • The national holidays should be considered strongly while planning a meeting.
  • The senior members should be greeted and treated with great respect.
  • Keep in mind that it is not just few power point presentations, statistical datas or empirical figure, which influence the business decision of an Indian. They give more weight age to mutual faith and trust and hence a nice rapport should be established before you go ahead with creating a long lasting business relation.
  • Do not be forceful and avoid high pressure tactics while going for negotiation.
  • Lastly, it calls for a fun filled celebration dinner after the relationship been established, as it will attribute the entire process with a sweet note.

The Growth Sectors in India

On the basis of a recent study by the Reserve Bank of India, there have been a lot of investments on the infrastructure sector in India and the rate is high enough with fifty three percent of the cost during the financial year 2010 in comparison to forty five percent growths during the year 2009. If statistics are to be followed, the total amount of investments in the infrastructure sector in India stood around three crore almost during the financial year 2010. However, the power sector has earned more investors followed by telecom, metal and metal products.

It is primarily due to a major lack of general awareness about hygiene due to improper services related to health; the healthcare sector in India does not look very promising. Although, the scenario has gone through lots of changes over the years particularly during the last couple of years, there are some developments that have been taking place in the healthcare sector in India and the changes are coming rapidly almost. According to a study conducted by a few of the global consultants, in the year 2007, it was predicted that the there would be loads of development taking place in this sector and the numbers would be jumping to a whopping twenty five billion from the rate that existed during the year 2007. Although, it has not been achieved till now, we must admit that developments are taking place and pretty fast and it is now expected that the growth rate in this sector would jump to around seventy billion in the year 2012.

For attracting foreign investors to the power sector that is identified as one of the most prominent investment sector in India, the Government has declared several policies and many efforts have been made through the passage of time. Among the policies that have been declared by the Indian Government, the most prominent one is the enactment of the Electricity act during the year 2003. The primary objective of the Act is to strengthen In order to attract foreign investments into the power industry of India; the government has announced several policies and has taken initiatives from time to time. The most important amongst all the policies announced by the government is the enactment of the Electricity Act during the year 2003. The Act was meant to strengthen the regulations and the strictures related various aspects of electricity such as generation, transmission, supply and also to promote a favorable competition among the major power companies that exist in India.

The power industry, healthcare sector and infrastructure sector in India has attracted a number of foreign investors and offered them good opportunities as a favorable investment sectors in this country. In fact, it is also counted among those industries that offers a winning situation for the both the economy and the investor with huge returns on investment. The plans and strategies that are being formulated by the Indian Government have also provided an ideal podium for investors to flock to this sector.

October 4, 2011

Investment: Destination India

India is a country with huge manpower that is equipped with enormous skills and this is one reason for investing in India and evident in the growing number of foreign companies and overseas investors. Despite this and the fact that Indian economy belongs to one of the most conspicuous economies around the world, there has been a sharp fall in economic growth that was earlier projected to grow rapidly at least in the long run. The performance or behavior of the Indian economy has particularly fallen in the short to medium term.

During the period of last five years that refers to the time exactly before the recession and the global financial crisis the economic growth was around seven percent on a yearly basis. Due to this strong and impressive growth, investing in India seemed to be a favorable prospect for the overseas companies and we have witnessed the arrival of several foreign companies in this country. The IT and service sector industries have provided an impetus to the economic growth and according to the financial analysts, within a very short time India will join the frontrunner and powerful economies of the world.

During the passage of time, foreign direct investment has emerged as one of the most significant and inalienable aspect of the Indian residents who are settled in foreign countries or NRI’s. On the basis of a survey called World Investment Prospects Survey conducted for 2010 to 2012, India is also one of the most preferred destinations of foreign direct investment. This survey was conducted by United Nations Conference on Trade and Development. In addition to this, another survey conducted by one of the big four firms Ernst and Young, the country has ranked fourth as far as foreign investing is concerned and it is referred to as European Attractiveness Survey.

The growth of foreign investment in India has increased three folds with a variety of business prospects and potential that is available in this country. However, at the same time, there is an increased need for a guideline on strategic investments so that the foreign investors keep pouring in. In other words, to have a better orientation of foreign investments and to maintain the flow of foreign investors, it is possible to get the expert’s guidance in the Government website that is referred to as OIFC.

According to the opinion of several people, the success of India with foreign investments and economic growth has been showing all along though the journey was not always pleasant as there has been an equal amount of delay during this process. Whether the high growth forecasts for the economy helps to provide a boost to the Indian economy or otherwise cannot be predicted immediately. With the country has opening doors to the foreign and domestic investors, the risks of investing in a developing economy should be reduced to a large extent.

Know more about Foreign Direct Investment in India

In layman’s words, foreign direct investment refers to the situation when a particular company or an individual belonging to one country invests in another country. The investment which is done could be a physical one like construction of a factory, land purchase, mining activities, etc.

Apart from the above mentioned types of foreign direct investment, joint-ventures as well as reciprocal-trade agreements are the other investment options to which one can resort to. In a joint venture, there are basically two or more than two organizations which handle the financial and the management of the investment made in foreign country whereas in the reciprocal- trade agreement, the two companies which make the same type of products reach on an agreement to proceed further as the distributor of each other at their own home country. Licensing a company to produce products in some other foreign county is also a form of investment falling under the category of FDI.

When any company makes a foreign direct investment for its expansions in another country, then it is termed as the horizontal foreign direct investment. On the other hand, when the companies make investments for increasing its sales and for the growth in business, then it is termed as vertical foreign direct investment. Vertical FDI occurs usually when any company assumes the role of a distributor or a supplier for any type of finished goods. This again can be divided into forward and backward vertical FDI.

When the company takes the role of a supplier then it is referred to as the backward vertical FDI and when the company acts as a distributor of the products is any other country is referred to as forward FDI.

The company is always benefited by the FDI’s as it enhances the reputation of the company by creating more job opportunities. Moreover the costs of the final goods which are produced are also less as the cost of import is not there. Foreign direct investment aids in increasing the levels of production and also in lowering the cost of production.

When a company thinks of investment options, especially that of FDI, then it needs to contemplate of various factors for accessing the foreign markets. It needs to make a stock of the domestic resources so that it has sufficient human resource as well as the financial stability for carrying on with the new undertaking. Apart from this, it also needs to check whether the potentiality of the market for the product it is going to launch. A thorough market study is essential before making a FDI decision. The competition that exists in the market and the consumer behavior are the other factors which need consideration if one is thinking of foreign direct investment.

Both the developed countries as well as the developing countries are able to attract foreign investment in various ways today. For e.g. it has been seen that few countries provide loans at a very low interest rates which makes most of the individuals living outside, in other countries avail the loan options in those countries.

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