8/7/2019 Advantages of Investing in India

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Advantages of Investing in India

India has a 20 million-strong scientific and technical manpower, more than the population ofTaiwan. The number of literates in India is more than the combined population of France and

Japan. India has a vast domestic market a 300 million-strong middle class population withsubstantial purchasing power and another 700 million-strong population whose capacity to purchaseis gradually increasing. Being a vibrant democracy with a large democratic set-up supplemented bya broad-based legal framework including arbitration and an independent judicial system, it boastsof a vast network of bank branches, financial institutions and well-organized capital and moneymarkets. These attributes make India a favorable destination for NRI investments.India also has a huge network of technical and management institutions of the highest internationalstandard for development of excellent human resources. India has an enviable record of honoringits international financial obligations and has never defaulted. The country has a strong Englishlanguage base for business purposes. The strong and vibrant small-scale sector is good enough forestablishing strategic alliances with its foreign counterparts. The strategic location of the countryin the context of the third world markets particularly the rapidly growing South and South-EastAsian markets together with a supportive infrastructure base help in promoting a healthy

environment for NRI inflows into the country.India has more billionaires than China. This year there are 15 billionaires in China but last year inIndia, there were 20 billionaires, according to the Forbes magazine. India has emerged as theworlds fastest growing wealth creator, thanks to a buoyant stock market and higher earnings. Anumber of Indian companies surpassed last years net profit in just six months of the current fiscal,reflecting accelerating corporate earnings. 44% percent of the top 100 of the Fortune 500companies are present in India. With its manufacturing and service sector on a searing growth path,Indias economy may soon touch the coveted 10 percent figure.The Indian diasporas business has turned hot of late. Government has always wooed non-residentIndians assiduously to attract more inflows. Apart from the money transfer business, whichcompared to money invested in India is smaller; the Centre is trying its best to persuade NRIs topump money into the country like never before. And, it has seen superlative success in re-centyears. The Prime Minister of India has announced dual citizenship for people of Indian origin. It has

given a big boost to the NRI community across the world. With recruitment levels for overseas jobsskyrocketing, there is scope for more money coming into India. According to a recent BusinessStandard report, in the last three years, 850,000 people went to West Asia alone. And even as theofficial figure for Indians living in the US is put at 2 million, unofficial estimates put it at 3.5million. And emigration to Canada and Australia continues to grow.The ministries concerned have made sure that rules and regulations are simplified to make inflowseasier. Where does the government see money being invested? Investment in bank deposits andcompany deposits may be made by NRIs.They are subject to different rules; investments with andwithout repatriation facilities are permitted under the schemes. As of now, NRIs are permitted tomake direct investment in partnership and proprietorship firms in the country. This, the NRIs cando by way of subscription for shares or debentures of Indian companies. Further, they can also nowplace funds in company deposits. NRIs who undertake not to seek at any time repatriation of thecapital invested in India and the income earned thereon are permitted to invest on non-repatriationbasis. NRIs also have the option of investing in mutual funds floated by domestic public sector andprivate sector mutual funds on non-repatriation basis. All they have to do is to make theirapplications to the Reserve Bank. They can also now invest in money market mutual funds (MMMFs)floated by commercial banks and financial institutions with authorization from the apex bank or theSecurities and Exchange Board of India (Sebi), the market regulator. Yet another option is to investin the securities of the Central or State governments and the National Plan/Savings Certificates bymaking remittances from abroad or out of funds held in their NRE/FCNR accounts. In effect, withregulations tapering off, compared with the scene some 7-8 years ago, non-resident Indians todayhave more choices to invest their hard-earned money in India. And, to make things easier andhassle-free, the government is doing all it can to persuade Indians who make big money away fromhome to park their funds here. Commendable though is the fact that the Indian diaspora has alsobegun to believe that it is better to channel their money home, thereby contributing to the

development process of the nation they actually belong to.

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