India is a land of opportunities, capable of attracting individuals, corporates, government bodies, including bilateral and multilateral institutions from diverse fields, as investors into the country. These investment opportunities are embedded in India's advantageous position on the world platform:-
- A three tier democratic system which ensures a stable policy environment.
- A well developed administrative and an independent judicial system.
- A vast geography endowed with diverse topography making India a repository of resources.
- A diverse cultural heritage which puts Indians at ease with the people from other cultures and provides a tolerant environment for the investors.
- One of the largest producers of agricultural commodities ensuring self-sufficiency.
- Manufacturing capability spanning almost all the segments of the economy.
- An unparallel resource of educated, hard-working, skilled manpower including engineers, managerial personnel, accountants and lawyers.
- A rapidly growing consumer base making it one of the world's largest markets for manufactured goods and services.
- A dynamic and robust financial system consisting of a comprehensive banking network, a number of National and State level financial institutions as well as a vibrant capital market. It is supported by a well laid out package of monetary and fiscal incentives as well as liberal and progressive policies.
- Large and diversified infrastructure spreading across the nation and providing easy access to the markets of other nations.
- A well-developed research and development (R&D) set up extending to diverse fields.
- Accounting standards similar to those followed internationally.
- A policy framework that provides clear guidelines for freedom of entry and location, choice of technology, production, repatriation of capital, dividends, etc., which are specifically aimed at enhancing the flow of investment.
- Sound economic fundamentals.
Given the potential, the Central as well as the State Governments have been undertaking several policy measures and incentives, in order to avail substantial share of the world investment boom. These policies and incentives are revised and updated regularly in accordance with the changing economic scenario in order to accommodate new areas of emphasis. These include:-
- Tax holiday and tax concessions including progressive reduction in rates of corporate taxes; import of capital goods at concessional customs duty, etc;
- Loans at concessional rates of interest;
- Subsidies in various forms;
- Setting up of Special Economic Zones (SEZs);
- Opening of the Indian capital markets to foreign institutional investors;
- Indian companies permitted to raise funds from international capital markets;
- Repatriation of profits is permitted subjected to certain conditions;
- Single Window clearance facilities have been provided in various States to simplify the procedure for investment;
- Signing several bilateral investment protection agreements with investing countries; etc.
Besides, setting up of the Investment Commission, in the Ministry of Finance, is another important initiative for enhancing and facilitating the flow of investment in the country. The Commission makes recommendations to the Government on policies and procedures to facilitate investment; recommend projects and investment proposals; and promote India as an investment destination. It undertakes the following activities:-
- Sectoral assessment of the investment opportunities;
- Preparation of an ‘Investment Handbook’ and a website, to promote India;
- Identification of, and personal meetings with, current and potential investors;
- Meetings with foreign embassies, foreign investor groups, Indian business councils and trade associations;
- Identification of policy / regulations which are deterrents to investment, etc.
As a result of all such efforts, foreign investment is welcome in almost all the areas, except those of strategic concern (for instance, defence and atomic energy) and generally 100% FDI under automatic route is permitted. In such a changed investment climate, India is offering attractive business opportunities in virtually every sector of the economy.