Investment Opportunities in India

July 2, 2013

May 16, 2013

Attractive investment opportunities for NRIs in India

“India is clearly becoming a more and more important player on the world stage in G20 context, in terms of its role in the global economy. It is very useful for us to exchange ideas and build the basis for future collaboration,” according to Mr Ben Bernanke, Chairman, US Federal Reserve.

India is the fifth best country in the world for dynamic growing businesses, according to the Grant Thornton Global Dynamism Index. The index gives a reflection of how suitable an environment it offers for dynamic businesses.

In addition, India’s economic confidence registered an increase of 8 points, to reach 68 per cent in August 2012 as compared to the previous month, according to the ‘Ipsos Economic Pulse of the World’ survey. This makes India the fourth most economically confident country in the world.

India is also expected to be the second largest manufacturing country in the next five years, followed by Brazil as the third ranked country, as per Deloitte Touche Tohmatsu Ltd (Deloitte).

The Government of India has relaxed foreign direct investment (FDI) regime in sectors including multi-brand retail, single-brand retail, commodity exchanges, power exchanges, broadcasting, non-banking financial institutions (NBFCs) and asset reconstruction companies (ARCs) in 2012 to attract more and more direct investments.

Business Opportunities in India

Mr Mahmood Al Hashemi, Director General of Ajman Free Zone Authority (AFZA), UAE will tour India and address a series of seminars and press conferences in Mumbai, Delhi and Ahmedabad this month. This high profile visit to the Indian sub-continent will be to initiate and build a long and lucrative means of economic cooperation between the two countries.

This will provide huge opportunity to young entrepreneurs doing business in India.

Here’s a list of 5 good opportunities non-resident Indians (NRIs) can look at:

  • Software: India’s software and services exports are likely to rise with export revenue growth projected at 13 to 15 per cent. With one of the largest pool of software engineers, NRIs can set higher targets in hardware and software development
  • Tourism: Tourism is a booming industry in India. With the number of domestic and international tourists rising every year, this is one hot sector NRIs must focus on. India with its diverse culture and rich heritage has a lot to offer to foreign tourists. Beaches, hill stations, heritage sites, wildlife and rural life, India has everything tourists are looking for
  • Automobile: India is now a hot spot for automobiles and auto-components. A cost-effective hub for auto components sourcing for global auto makers, the automotive sector is potential business in India for foreign investors
  • Textiles: India is famous for its textiles. Each state has its unique style in terms of apparels. India can grow as a preferred location for manufacturing textiles taking into account the huge demand for garments. Places like Tirupur and Ludhiana are now export hubs for textiles. A better understanding of the markets and customers’ needs can boost growth in this sector and attract direct investments
  • Education and Training: There is a good demand for education and online tutorial services. With good facilities at competitive rates, India can attract more students from abroad. Unique teaching methods, educational portals and tools can be used effectively to make the sector useful and interesting

March 28, 2013

March 4, 2013

How investment guide helps NRI to invest in India?

A growing India offers opportunity across sectors — notably infrastructure, pharma, automobiles, education and many more — in an investor-friendly environment. An investment guide answers all your questions about investing in India. The guide provides information about registering a company, entry strategy, state policies and doing business in India.

Top 6 safe investments in India

  1. Bank Fixed Deposits: Bank failures are rare in India, so bank fixed deposits are a very safe way to invest your money. You know the rates up front, so there is no uncertainty there. Taxes can eat into your returns though, especially if you are in the high tax bracket, but even then a fixed deposit (FD) that compounds quarterly and is done for a long maturity will yield well.
  2. Tax Saver Bank Fixed Deposits: Like the bank fixed deposit, this is also a very safe and certain investment. The drawback is that money is locked in for at least 5 years, and the positive is that you get some tax benefit to juice up your return.
  3. Public Provident Fund: This is also a very safe investment, and the returns are spectacular, especially for someone in the 30 per cent tax bracket. If you don’t mind the 15 year wait period, no other fixed income investment can match the public provident fund (PPF) return for the safety it offers.
  4. National Savings Certificates (NSC) IX Issue: This is another safe investment with decent returns.
  5. Senior Citizens Savings Scheme (SCSS): A lot of people realise that over the years, the SCSS is quite useful along with the monthly income scheme of the post office for their parents, and relatives and this is a good business opportunities as well.
  6. Tax Free Bonds: These bonds aren’t as safe as a bank deposit or a post office deposit but they can still be categorised as fairly secure instruments. If you buy these bonds from the stock market right now, they are trading at higher than their face value, so your effective yield will be less but then there is always a chance to make capital gains if interest rates come down.

Investment Tool Guide

  • Welcome to Invest India: Invest India is the country’s official agency dedicated to investment promotion and facilitation. Its mandate is to become the first reference point for the global investment community. It provides granulated, sector-specific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services. Its mandate also includes assisting Indian investors in makings informed choices about business opportunities overseas.
  • Investment Toolkit: In order to ease the process of investing into India, Overseas Indian Facilitation Centre (OIFC) has developed an online toolkit–Investment Guide to India. The toolkit serves as a simple, practical and stage-wise investment guide for the non-resident Indians wanting to invest in India.

Investment Guide to India provides an end-to-end investment solution, customised to the needs of the potential diaspora investors.

January 28, 2013

India as an Investor-Friendly Country

The attractiveness of the Indian market is regularly substantiated through the investments made by various multinational corporations in the country, which demonstrate their belief in the strong fundamentals of the Indian economy. The Government of India policies backed with positive business environment, availability of talented workforce and stable outlook for the macro-economy has made India a global hub for international players to park their funds in various investment sectors.

There is a parallel process of business and industry with various countries taking note of the opportunities that recent economic developments in India have created for them.

Projections

As per the Government projections, Indian infrastructure landscape would attract investments worth Rs 49,000 billion (US$ 881.29 billion) during the 12th Five Year Plan period (2012-17), with at least 50 per cent funding from the private sector.

Sectors

For overseas Indians, India offers a tremendous opportunity for investment and wealth building as India is slated to grow at the rate of 8%-10% for the next few decades. There are various investment sectors where non-residents of Indians (NRIs) can explore money-spinning deals and do profitable business.

Investment Options

Most of the Indians who have migrated to foreign countries for professional and personal reasons, still feel the desire to be associated with their mother land in some way or the other. They try to make investments in India through different avenues. There are numerous investment options for NRIs in India that can yield them lucrative benefits and profitability both in short run as well as long run. A few of them are as follows:

  • For the NRI who is looking for high returns, attention should be concentrated on the huge number of central and state sponsored projects in key infrastructural sectors like education, healthcare and construction
  • In general NRI investment is made through three major sectors. These include bank accounts, investment in immovable properties and investment in securities and debts
  • There are many types of bank accounts. The regulations vary according to the repatriation of the interest income
  • The securities in which the NRI can invest through the automatic route include agriculture, mining, alcohol brewing, power, industrial explosives, hazardous chemicals, drugs and pharmaceuticals, transport, insurance, industrial parks, non banking financial institutions etc. You do not need the approval of the Reserve Bank of India (RBI) to invest in these securities. In some cases, the approval of the Foreign Investment Promotion Board (FIPB) may be required. These include sectors like tea, infrastructural companies except telecom, publication of newspaper and periodicals, courier service and single brand product retailing
  • If you are looking for investment opportunities with repatriation benefits, you will have to invest in mutual funds, term deposits and bonds for at least three years
  • A NRI can invest in proprietary and partnership firms in India, but the income will not be repatriated outside the country
  • NRI can directly invest in real estate in India except if you are buying agricultural lands or plantations. Investments in housing schemes and commercial properties are free

January 4, 2013

Policies for foreign investors to do business in India

“India is clearly becoming a more and more important player on the world stage in G20 context, in terms of its role in the global economy. It is very useful for us to exchange ideas and build the basis for future collaboration,” according to Mr Ben Bernanke, Chairman, US Federal Reserve.

India is the fifth best country in the world with dynamic growing businesses opportunities for non-resident Indians (NRIs). The Grant Thornton Global Dynamism Index gives a reflection of how suitable an environment it offers for dynamic businesses.

Scenario of Indian Economy

The Indian economy continues to grow at a good pace and holds a strong position on the global map. The country’s gross domestic product (GDP) has been growing at an average rate of 8.5 per cent for the last five years.

India’s economy is amongst the largest in the world on the basis of Purchasing Power Parity. It is today one of the most attractive destinations for business and investment opportunities for NRIs and foreign investors with the available large manpower base, diversified natural resources and strong macroeconomic fundamentals. In FY 2011-12, the country attracted foreign direct investment (FDI) of around US$ 46.8 billion in various sectors.

The economy of India also boasts a robust financial system and deep capital markets. India’s demographic are very attractive with approximately 65 per cent of the total population falling in the age group of 15 to 64 years.

Foreign investment framework of India

The foreign direct investment (FDI) regime has been progressively liberalised during the course of the 1990s and continues to do so in the 2000s, with most restrictions on foreign investment being removed and procedures simplified. Foreign investors can invest directly and do business in India, either on their own or as a joint venture.

Some of the features of the consolidated FDI Policy of India and incentives offered by it:

  • Indian companies are permitted to issue equity shares, fully, compulsorily and mandatorily convertible debentures (FCD’s) and compulsorily and mandatorily convertible preference shares (CCPS) to the non-residents subject to pricing guidelines/valuation norms prescribed under FEMA
  • Foreign investment is calculated on the basis of ownership and control of the Indian company.
  • Use of foreign brand names/trademarks is permitted for the sale of goods in India
  • “Single window” clearance facilities and “investor escort services” are available in various states to simplify the approval process for new ventures

Sole proprietorship in India

Sole proprietorship is the oldest and most common form of business. It is a one-man organisation where a single individual owns, manages and controls the whole business. An NRI or a person of Indian origin (PIO) residing outside India is allowed to do business in India through a sole proprietorship concern. The investment should be made on non–repatriation basis subject to satisfying certain other conditions.

Tax Incentives in India

The Government of India, for the purpose of accelerated growth of the Indian economy, has extended incentives in the form of tax holiday, deductions, rebates etc under the direct/indirect taxes. Primarily, such incentive relates to export promotion, new industrial undertaking, infrastructure facilities, software industry, research, promotion of backward areas etc.

November 23, 2012

Doing Business in India – A profitable opportunity for NRIs

The Indian economy continues to grow at a good pace and holds a strong position on the global map. The country’s gross domestic product (GDP) has been growing at an average rate of 8.5 per cent for the last five years.

India’s economy is amongst the largest in the world on the basis of Purchasing Power Parity. It is today one of the most attractive destinations for business and investment opportunities with the available large manpower base, diversified natural resources and strong macroeconomic fundamentals. In FY 2011-12, the country attracted foreign direct investment (FDI) of around US$ 46.8 billion in various sectors.

Advantage India

  • World’s largest democracy with 1.2 billion people
  • Stable political environment and responsive administrative set up
  • Well established judiciary to enforce rule of law
  • Land of abundant natural resources and diverse climatic conditions
  • India’s growth will start to outpace China’s within three to five years and hence, India will become the fastest large economy with 9-10 per cent growth over the next 20-25 years, according to a report by Morgan Stanley
  • Investor friendly policies and incentive-based schemes
  • India’s economy will grow five-fold in the next 20 years, as per a study by McKinsey
  • Cost competitiveness; low labour costs
  • Total labour force of nearly 530 million

Investment Options for NRIs in India

India offers a stable, prosperous foundation to grow one’s business. It offers rich business opportunities and markets to non-resident Indians (NRIs) for new products and services. It is one of the fastest, easiest and lucrative investment destinations in the world to set up business. India is the second-most profitable destination, according to UNCTAD’s World Investment Prospects Survey 2010-2012.

India is in the midst of rapid economic and social transition and is giving a feel good factor to the NRIs, especially the real estate sector. Returns from real estate investments have consistently performed well and have even outperformed other businesses in India.

The health care sector has also opened new business opportunities in India for NRIs to invest in the country because of the rise in disposable income, penetration of health insurance and change in lifestyle of present generation.

There are many other exciting business opportunities in India, especially, for entrepreneurs dealing in outsourcing technology, internet ventures, software development, e-commerce, etc.

Government’s intervention on policy issues, especially, tax regulations and FDI in sectors like retail, aviation etc. will play an important role in driving large transactions, especially, inbound deals. India’s growth story remains intact and NRIs can look forward to see better investment options in the second half of 2012.

Success Stories

India has witnessed a number of success stories – both Indian and multinational firms have registered higher profits, increased turnover and higher sales over the years. This has prompted them to reinvest profits and inject fresh capital into their processes in order to reap the benefits of the India growth story.

Investments have been made by Corporate across the board and almost all the sectors have seen inflow of funds. Global players such as Daimler Chrysler, General Motors, Ford, LG Electronics, Samsung, Sony, Amway, Tupperware, Pepsico, McDonald’s, IBM, Oracle, Microsoft, Aviva, Nortel, and Nokia among others have benefited from their business in India and have made expansion plans for the country. The companies plan to expand by way of product diversification, setting up manufacturing base in India, increasing the existing production capacity, establishing research centres in India, etc.

October 30, 2012

FDI in retail sector to create 10 million jobs in India

India has emerged as the fifth most favourable destination for international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia, according to A T Kearney’s Global Retail Development Index (GRDI) 2012. “India remains a high potential market with accelerated retail growth of 15-20 per cent expected over the next five years,” highlighted the report.

The foreign direct investment (FDI) inflows in single-brand retail trading during April 2000 to June 2012 stood at US$ 42.70 million, according to the latest data released by the Department of Industrial Policy and Promotion (DIPP). Cash and carry represents an opportunity worth around Rs 8,250 billion (US$ 154.45 billion) of the Rs 27,500 billion (US$ 514.84 billion) annual retail business in India. Online retail business is another format which has high potential for growth in the near future. India’s e-retail industry is likely to touch Rs 70 billion (US$ 1.31 billion) by 2015, up from Rs 20 billion (US$ 374.43 million) currently, as per an industry body report.

The recently announced FDI guidelines in the Indian retail sector are likely to create 10 million jobs over the next 10 years, according to Indian Staffing Federation (ISF). The report also mentioned that the new job opportunities in the sector will make it the largest sector in organised employment.

The federation has welcomed the new FDI in retail announced by the Government of India. For the record, the Government has announced its decision to allow 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail. In addition, the Government has also opened up the aviation sector and put up four PSUs for disinvestment.

The ISF said that FDI in retail sector will have a much wider impact on organised employment as compared to what happened in the IT sector over a decade ago. The federation also said that these measures will open doors for the low-skilled people.

It is believed that logistics and supply chain companies are also expected to make rapid progress considering the fact that they will be the link between small manufacturers, farmers and the organised retail chains.

The close integration within the organised retail chains will support the small producers in gaining access to the latest processes, systems and technologies available in the market.

With increasing disposable incomes, expansion of stores and supporting economic factors, retail sector in India is expected to grow to about US$ 900 billion by 2014, according to a report by global consultancy and research firm, PricewaterhouseCoopers (PwC).

The next generation of India’s retail environment is favourable for the rise of luxury goods. Consumer markets in emerging market economies like India are growing rapidly owing to robust economic growth. The retail sector in India is highly competitive because of ever changing consumer preferences and the need for marketing differentiation. The retail enterprises need to focus on costs throughout the consumer value chain because of proliferation of new products and categories and ever increasing demands to optimise value chains.

October 4, 2012

Business Opportunities for NRIs in Indian Market

India is the largest democracy in the world. The country ranks second in the world in terms of total population. The liberalization and globalization of the Indian economy has led to more foreign direct investment (FDI) inflows in Indian markets. As a result, the scope for business in India has increased.

There are plenty of business opportunities in India for Foreign Investors, Non-Resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Corporate Bodies (OCBs). The country offers liberal policy regime, along with easy availability of loans, funds and various other initiatives, which makes India a lucrative investment destination for NRIs and PIOs.

Some of the promising sectors where NRIs may invest include power, pharmaceuticals, mining, hotel & tourism, coal & ignites and other infrastructural projects. NRIs can also invest directly in Indian real estate except buying agricultural lands or plantations. They can look at huge number of central and state sponsored projects in key infrastructural sectors like education, healthcare and construction for higher returns.

Business Opportunities in India

Some of the major factors that help businesses in India to flourish include:

  • High number of people with disposable income, emerging middle class, low cost competitive workforce, and investment friendly policies
  • Availability of rich natural resources
  • Availability of a considerable section of population proficient in English
  • A well-established banking system consisting of public and private banks and other financial institutions
  • Competitive advantage in Information Technology, which can be used to enhance productivity in Industries
  • Improved infrastructure for business ventures

Steps for NRIs /PIOs to start business in India

  • Applying and getting PIO card (Person of Indian origin) – to make investments in properties, etc
  • Getting permanent account number (PAN card) from the Indian tax department, making it smoother to undertake all business and investment transactions above Rs. 50,000
  • Selecting a right and highly profitable business in India among various available options
  • Selecting an experienced person/ business professional to plan business and investments
  • Selecting a business partner in India and start a business

Investors can also take the help of business incubators and facilitators to become established and sustainable during their start-up phase. Business incubators are programs designed to nurture the development of entrepreneurial companies. They provide the companies with business support services, business advice, assistance with business planning, market and international networks, and also help in obtaining finance. Incubators usually offer companies rental space with flexible leases, basic office services and access to equipments all under one-roof. Successful completion of a business incubation program increases the chances of a start-up company to stay in business in India for long term.

Government Initiatives

To attract foreign investment into India, the Government is offering several facilities to NRIs, PIOs and OCBs. The economic reforms have brought policy changes in terms of ease of entry, investment, location, usage of technology, import and export. These changes have created an investment-friendly environment, which results in more business opportunities in India.

NRIs are permitted to open bank accounts in India with funds remitted from abroad, foreign exchange brought in from abroad or with funds legitimately due to them in India, with authorized dealer.

Further, the Reserve Bank of India (RBI) has granted general permission to NRIs/PIOs, for undertaking direct investments in Indian companies under the automatic route.

August 29, 2012

Investment Trends in India

India has grown as one of the significant economies in the world having immense potential for long-term growth. Indian economy is developing at a faster pace and is brimming with investment opportunities. As per McKinsey Global Institute, the average Indian’s income will triple by 2025. This will result in more investment in the coming years.

India: Investment Potential

According to UNCTAD’s World Investment Prospects Survey 2010-2012, India is the second-most profitable destination for foreign direct investment (FDI) in the world. Indian markets have significant potential offering prospects of high profitability and a favorable regulatory regime for investors.

Investment for saving purpose in future is certainly a good idea. There are large numbers of companies that offer plenty of opportunities for different individuals. India with a matured capital market, backed by liberal policies and strong banking system has turned to a profitable business ambience both for domestic and international businessmen.

Entry strategies for global investors in India

The various entry strategies for foreign investors in India have helped to bring in huge amounts of FDI into India. Some of the investment strategiesinitiated by Indian government are:

  • A foreign company can start its operations in the country by setting up a new company according to the Companies Act 1956. The foreign direct investment of 100 per cent has been allowed by the Government of India in such companies.
  • An international company can start its operations in India by forming joint collaboration with an Indian company.
  • An international company can start its operations in India by setting up their branch office, representative office, and project office.
  • A foreign company can start its operations in India by establishing a wholly owned subsidiary in the sectors, where foreign direct investment up to 100 per cent is permitted under the FDI policy.

Areas of Investment

The scope for business in India is enormous and has led to more investment options in India. Some key areas like infrastructure, petrochemicals, power, automobile, electronic hardware, etc. are receiving attention not only for foreign but for domestic ventures also.

Further, there are various exciting opportunities for conducting business in India, especially, for entrepreneurs dealing in outsourcing technology, internet ventures, software development, e-commerce, etc. People can also find a niche market in India where they can sell various products like health care products.

Major initiatives in India

There are various initiatives taken in India that provide a liberal and investor friendly environment:

  • Simplified investment procedures
  • Liberalised trade policy and exchange regulations
  • Intellectual property rights
  • Enactment of competition law
  • Financial sector reforms

There is no dearth of investment options in India after the investment under the automatic route has been allowed by the Government. The Government has also revised its policy regarding FDI in Indian companies engaged in retail trade. Foreign investors will now be permitted, subject to certain conditions, to own up to 100 per cent of single-brand retail trading companies in India.

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