Investment Opportunities in India

March 20, 2013

Investments options for NRIs in Indian infrastructure sector

Infrastructure development in India has contributed majorly in the country’s economic transformation and growth during the last decade. Roads, ports, railways and power are key segments of the infrastructure sector. Some of the key facts related to the same are –

  • Indian Shipping segment, with 187 minor ports and 13 major ports, is spread across nine maritime states
  • The Indian Railways network is spread over some 64, 000 km, with 12, 000 passenger and 7, 000 freight trains plying each day from 7, 083 stations carrying around 23 million travellers and 2.65 million tonnes (MT) of goods daily
  • Indian road network is the second largest in the world with a total length of 4.1 million kilometres (km)

Investment Opportunities for NRIs

Overseas investors looking for high return on investments are going to target Indian infrastructure companies in the coming years, says a report by research agency Preqin. As per the study, India is attracting the highest number of unlisted, closed-end funds that focus on a single country, making it the most preferred choice among the business investors. India is expected to require around US$ 1 trillion worth of infrastructure investment over the next five years

Non-resident Indians (NRIs) investing in India can choose from sub-sectors such as power, telecom, roads and ports. The Preqin report says 74 per cent of India-focused funds will invest in greenfield projects, 84 per cent in brownfield assets, and 42 per cent will buy out the stakes of other PE funds.

Investments Policy Updates

  • FDI up to 100 per cent under the automatic route is permitted in exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products, actual trading and marketing of petroleum products, petroleum product pipelines, natural gas/LNG pipelines, market study and formulation and Petroleum refining in the private sector. This will be subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies
  • FDI up to 49 per cent is permitted under the Government route in petroleum refining by the Public Sector Undertakings (PSU)
  • FDI up to 100 per cent under the automatic route is allowed both in setting up new and in established industrial parks from overseas investors

Recent Investments in Indian Infrastructure Industry

  • IVRCL Ltd has entered into an MoU with the Haryana Government for the development of Rai Malikapur-Kharak road corridor which would cover a stretch of 151 km of Rai Malikapur close to the Rajasthan border up to Kharak corridor and enhance the north-south connectivity. The Rs 1, 605 crore (US$ 292.23 million) project will take about 30 months to execute
  • Indian Railways has recently launched an application namely RailRadar which envisages an interactive map to allow users to track train movements on real-time basis. Such an application has been launched for the first time in India, wherein any of the public transport system can be tracked on the internet and mobile

Future of Indian Infrastructure

India is betting high on business investors in infrastructure as the Government hopes that the private sector, through public-private partnerships (PPP), will invest US$ 350-400 billion in infrastructure sectors (like roads, ports, railways and airports) between 2012 and 2017.

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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.

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.

FDI in Indian Pharmaceutical Market

The pharmaceutical industry in India is one of the largest and most advanced among the developing countries. The industry stands third in the world in terms of volume. It ranks 14 in terms of value and is expected to grow 8 to 9 per cent annually. According to a research done by Associated Chambers of Commerce and Industry (Assocham), the Indian pharma industry is expected to reach US$ 20 billion by 2015, making it one of the world’s top 10 pharmaceuticals markets.

In India, there are many small sectors, medium sectors, private limited companies and public companies that have been consistently manufacturing various medicinal products to meet the increasing demands of the people. The foreign investors can invest in Indian companies through the purchase of shares, debentures, equities, or bonds from an Indian company.

Pharma industry in India is growing at a rapid pace, marked by a number of mergers and acquisitions and growth in foreign expenditure. The sector is going to be a major area of focus in the coming years as Indian medicines are increasingly becoming popular in many developed and developing countries because of the cost effectiveness and easy availability.

India saw FDI inflow of US$ 341.49 million in the drugs and pharmaceuticals sector between April 2009 and February 2012. Also, the government has liberalised investments made by registered Foreign Institutional Investors (FIIs) under the Portfolio Investment Scheme (PIS) from April 10, 2012. Earlier, these spendings required approval from the government.

There are numerous ways for foreign company to enter in to an Indian market. Different types of foreign investment in India are:

Green field investment is FDI when a company establishes a subsidiary in a new country and starts its own production. It involves construction of a new plant, rather than the purchase of an existing plant or firm. According to the latest rules of Reserve bank of India (RBI), FDI, up to 100 per cent, under the automatic route, is permitted for green field investments in the Indian pharmaceutical sector.

Brown field investment is FDI that involves the purchase of an existing plant or firm, rather than construction of a new plant. For e.g. many host countries encourage the formation of joint ventures, as a way to build international cooperation. Joint venture is an equity and management partnership between the foreign firm and a local entity in the host market. FDI, up to 100 per cent, under the government approval route, is permitted for brown field investments in the Indian pharmaceuticals sector. Under the new rules, the overseas investor will have to seek permission from the Foreign Investment Promotion Board (FIPB) for any merger or acquisition.

In India, the cost of setting up research and development laboratory, scientific equipments, administration costs, transportation cost, raw materials cost and licensing procedure is much less when compared to any developed countries. The main determinants of FDI in India are availability of huge natural resources, cheap labor, steady economic growth, huge benefits and concessions granted by government, increasing population and per capita income, etc. So, there are huge opportunities for foreign investment in India.

Investment Scenario in Indian Market

The process of reforms as part of liberalization has resulted in greater investment in Indian market. In today’s economy of less income growth and highly increasing cost of living, one has to know how to use his/her savings to generate higher returns. Availability of too many options and no clear idea about these choices is creating a hostile situation for the investor to choose the best among the available alternatives.

An investor has several investment alternatives (such as stocks, bonds, precious metals, etc.) to choose from, depending on his risk profile and expectation of returns. Different investment substitutes represent a different risk-reward trade off. Low risk investments are those that offer assured, but lower returns, while high risk investments provide the potential to earn greater returns. Hence, an investor can choose the most suitable investment on the basis of his/her risk tolerance.

Best investment options in India

Some of the investment alternatives available in the Indian investment market are:

  • Investment in Fixed Deposits- FD is one of the safe investment options with the current annual rate of interest of 10 per cent.
  • Investments in Insurance- Insurance-cum-investment options like unit linked insurance plan (ULIPs) are beneficial for the investors. Insurance offer quality services to cover life, money and assets along with low-risk profits.
  • Investment in Mutual Funds- People may select mutual funds as an investment alternative on the basis of long term performance, short term performance, consistent returns, etc.
  • Investment in Equity- Private equity as an investment substitute is growing fast in India. With a business of US$ 20 billion in 2010-11, the share of equity investments is expected to increase in coming years.
  • Investment in Public Provident Funds- PPF is a government guaranteed fixed income security with a minimum amount of Rs 500 and maximum of Rs 1, 00,000 in a financial year; PPFs are now a popular choice of investment in long run.

Points to be considered before taking investment decision

Risk – It is important for the investor to choose the investment option on the basis of his/her risk profile. For e.g. – A low risk investor should not invest into equities. He should look for the safe option for investment. Risky asset class causes a loss of principal.

Liquidity – Liquidity is also an important criterion for the selection of Investment Avenue. For e.g. – An investor should not invest into public provident fund (PPF), if he needs money in 3- 4 years time frame. PPF has minimum lock in period of five years.

Time horizon – Investment should be done by considering the specific time horizons. For e.g. – For short term investment, mutual fund or fix deposit could be a good option, where as for long term, real estate and regular investment into equities could be a good option.

Taxation – Taxation affects the real returns of investment, investor should always look at the tax aspect of any investment before investing into it.

The scope for business in India is vast. Indian economy has grown as one of the significant economies in the world having immense potential towards long-term growth. The growth has been backed by the various industrial sectors to a great extent. The sectors mainly include technology, manufacturing and service industry.

January 19, 2012

Increasing investment opportunities in India

Investment is the best way of making money grow without making any effort. Investment helps money grow by adding hefty returns on the sum invested by an individual or concern. Unlike a job or a business, one doesn’t need to make any physical effort to add up to the sum invested. It grows automatically. But all types of investments involve risk that one needs to be prepared to take. India is among the fastest growing countries in Asia and it offers grand scopes for people to invest and enjoy hefty returns. Investment options in India are diverse and majority of them are low in risk.

The control-free economy of India allows the country people as well as the NRIs and international investors to put money for rolling. Several industries are growing at a great pace increasing investment opportunities in India, since most of them are almost untapped. Besides, traditional investment options are there for people who are not ready to take the risk of putting their money on growing sectors.

Traditional investment options in India include Fixed Deposit, Insurance, Public Provident Fund, Stock Exchange, Equity, Mutual Funds, National Savings Certificate, Gold Deposit Schemes, Real Estate and NRO Funds. Investing in FD is the ideal investment options for the aged people as better returns are offered by the banks and it also acts as a tax saver. PPF is a long term deposit plan but at the end of the term, the invested money comes out with hefty returns added to it.

PPF and FD are also safest since they are supported by the Central government. Investing in stock exchange is certainly risky but if you play with patience, your money may grow very steadily. To be safe, you should check the investment portfolio of the company that you are buying shares of. The level of risk involved in mutual fund investment is similar to that of stock exchange but the possibility of earning profits is also quite fare here.

Gold Deposit Scheme is a relatively new concept but at this point of time, it is the best way to invest money. The value of the yellow metal is going up in bullet speed and hence you can expect mammoth return on your investment. However, investment is gold deposits is not open to individuals in India. It is for trusts and companies only.

Another grand investment opportunity is now being offered by the real estate industry. The real estate sector in India is growing at a rapid pace and the way value of land and rate of interests on home loans are soaring, one can expect quick and hefty returns on the money invested.

Other industries and sectors that are offering grand investment opportunities in India at this moment are Education health-care, Software Industry, BPO-KPO and food processing. As the Government has concentrated on improving the standard of education, scopes for building new schools and colleges have come up. The health care sector too is developing very fast but lack of updated infrastructure is creating scopes for the foreigners to invest their money here.

Growing industries encouraging people to start business in India

India is developing very fast as a nation and its economy is growing steadily opening new avenues for people to start businesses. The country is extraordinarily rich in various resources and offers very cheap labor that entrepreneurs can make great use of. Doing business in India is a lucrative option for people having financial strength and the will to take the risk. The best thing about the country is that majority of the industries and sectors are almost untapped and hence the fear of facing stiff competition is less. Young Indian entrepreneurs have identified these sectors and have started to make foray but yet, there are lots of scopes for the international business houses to start ventures here, since the country is inviting FDI in various sectors. FDI India is certainly a term that is alluring plenty of international business persons and firms to jump into ventures in this Country with huge business potential.

Some of the existing and emerging sectors with grand scopes for doing business in this country are:

  • Tourism
  • Automobile
  • Textile
  • Social ventures
  • Software
  • Engineering goods
  • Franchising
  • Training & education
  • Food processing
  • Corporate demands
  • Ayurveda & traditional medicine
  • Organic farming
  • Media
  • Toys
  • Packaging
  • Healthcare
  • Energy solutions

Tourism is one of the most booming sectors in India and it offers enormous scope for new entrepreneurs to test their fortune. Countless number of spots for scenic beauty, pilgrimage sites, historic sites and adventure tourism make the country a tourism hub and allures business people to invest in the hospitality business.

Automobile is another major sector in India and with the rise of people’s buying capacity, the market is expanding continuously. Apart from national brands, foreign automobile majors are enjoying significant share of the automobile market here.

Indian textiles are acclaimed across the world for the superior quality fabrics. Textile goods are exported in bulk to different corners of the world on a regular basis. With a rise in demand, the textile sector is giving greater scopes for doing business in India to the local people as well as international business houses.

Social ventures too are very prospective as a business at this time as unemployment is a major issue in the country. Employing young, talented and skilled youth in works could make different business ventures viable here. Availability of cheap labor is an added advantage.

Software industry is growing at a rapid speed in India creating opportunities for entrepreneurs to make their foray. Increasing demand for advanced software has made software development a lucrative business proposition. Besides, KPOs and BPOs are creating spaces for business houses to invest and set up companies.

All these industries are going to expand significantly in the coming years as demand for their services is on a continuous rise. Hence, if you want to establish yourself as an entrepreneur, take the risk of playing with your money. You may also start with small ventures in comparatively smaller sectors like food processing, toys and packaging. And since the industries are ready to welcome FDI India is going to be a haven for the international entrepreneurs in near future.

January 9, 2012

The Best Investment Opportunities in India

Presently it has been found that most developed countries are increasing their investments in India. The reason behind this is the varied industrial opportunities that this vibrant democratic system of the country offers to investors. The legal framework of the country is highly expansive. The infrastructure of India also is growing rapidly as it has a good network of business institutions, banking facilities and the capital market is highly organized.

The various sectors that are worth investing in India are namely:
Education: The education system of India has been praised by the world educationists from a long time. Along with private investors the government too is taking care to see that the quality of education is of the best quality. Actually the population of India comprises of 50% youth. There are 367 universities and about 18000 colleges. Teaching is a respectable profession and many sought after it. International schools have entered the country too because they have seen great prospects. Biotechnology and aeronautics are very popular courses of today in India.

Software Industry: This is another most promising field where investments are sure to be profitable. India is well known as the IT hub and that is because the intelligent youth of India are providing great services at a very reasonable rate. Moreover, it is continuously growing and the revenue output is very high. The software companies are CMM certified which is an added advantage that attracts investors to this sector. Hence it has been rightly thought that investing in this giant software industry is surely a good decision.

BPO Services: Along with the software industry, the KPO (Knowledge Process Outsourcing) and the BPO (Business Process Outsourcing) services that are linked to it are also growing at a tremendous rate and that is also another reason of investors taking great interest in this field. According to the facts stated by NASSCOM, the BPO industry only is expected to reach a value of $30 billion by the year 2012. It has been predicted that the KPO industry is also supposed to reach the $10 billion by the 2012.

Food processing: India is an agriculture based country. Among the various flourishing industries, food industry has gained great importance as it acts as a connector between industry and agriculture. Hence it is quite obvious that the industry of food processing is bound to be the largest and the best field for investment opportunities in India. It is patronized by not only the government but is supported by cooperatives and private investors also.

Stringent rules have been formulated and government bodies set up to keep control over the functioning of the various units. To ensure safety of the investors government has introduced the National Food Processing Policy also.

If you are interested to invest in India Online you can very well do so as the economy of the country is always developing and therefore it is the appropriate market for investment. India is highly influenced by the global markets and that is seen in her purchasing power.

So if you are planning to invest in Indian Industries, then look straight to the world’s largest super power. Investing in India is surely the right decision.

Top Reasons for Investment in India by Overseas Indians

Real changes are being taking place in the scenario of Indian economy and this is really going to leave a great impact in the prospect of India. Hence, the much predicted and awaited glory of Indian economy in 2050 won’t just remain as a mere hype but will soon become a reality beckoning the proud Indians.

It is been anticipated widely that the performance of the external sector will continue to show a overall development in all spheres and the revolution taking place worldwide in terms of outsourcing bears adequate testimony to this. It is just not in the service sector the huge development can be witnessed but also in the research and manufacturing sector the welcome changes can be noticed. The liberal rules and policies and market guarded by well devised regulations are the principal sources to draw capital towards the growth of India on the investment side.

Now let’s concentrate on the fact that why investment in India is a lucrative option for Overseas Indians. Let’s harp on the chief reasons attracting the NRIs to decide about investing in India.

The reforms started taking place about 20 years from now when the twin devaluations initiated the major push during the year 1991. Alongside, several other developments took place around the same time in order to make the Indian economy resilient enough.

The key factors include exposure of the Indian economy to the foreign investors, the growing strength of the domestic financial system, the liberalised import policies, and the interest and exchange rates being rationalized, the environment backing up the industrial investment and the people-intensive services sector has turned out to much more conductive.

India is growing steadily as the fastest player among the global economies. There had been changes in the government bodies but it never hindered the growth in any way. In the long run the measures will be more pronounced as the focus will get shifted to incorporating the measures in reality. A shift in the demographics is also expected and this led to a greater amount of Indian population falling in the bracket of ‘working class’ age and this will ensure the Indian economy doing much better.

The focus on the agriculture and the infrastructure sector of Indian economy has been renewed to a great extent during the recent times and this has put forward a new thrust to the economic development in India making investment in India a much sought after choice.

The foreign direct investment (FDI) not just intensifies the domestic capital but it also helps in enhancing the competitiveness and the productivity of the economy and brings along world class technology, products/services, and processes and of course jobs. Therefore in turn a virtuous circle of higher incomes, higher consumption activity and even higher investment is triggered in the long run.

The outsourcing boom in India is also one of the major sources from which the country has benefited to a great extent. The types of ‘outsourcing’ work that have made their way to India are mostly related to research and development, manufacturing of auto parts and IT departments and networks. The Indian subcontinent is slowly gaining confidence and hence more of value added work is on the way to be landed in the country.

Lastly, the Securities and Exchange Board of India and the RBI regulating the Indian stock and debt markets including banks and mutual funds well and hence there are little chances of irregularities being committed. Therefore a drastic improvement in terms of Indian institutional Infrastructure can be noticed and this has yet strengthened India as one of the best financial markets in the world thus encouraging NRIs to invest in India.

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.

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