What is it like for Foreign Investors to do Business in India?
The current government is very confident that India has improved its game plan when it comes to providing foreign investors with the necessary provisions for doing business easily in the country. As per leading financial consultants in Mumbai, India has taken several steps to ensure the country has an appealing ambiance for foreign investors. In the last Ease of Doing Business ranking by the World Bank, India moved up from #142 to #100 on the list.
As per Direct Tax Consultants in India, over the past few years or so, India has received over $170 billion in FDI (foreign direct investment). After all that is said and done, it remains to be seen how India fares in next year’s report of the World Bank’s Ease of Doing Business ranking.
Tax consultants in India state the following features that a foreign investor looks for in a country before investing in the same:
Stability of the Government
From an investor’s point of view, what matters most is the government of that county is stable and has been in power for quite some time. A stable government sends out the indication that whatever changes and reforms in policies related to the economy/business have taken place are correctly implemented.
Size of the Market
Investors also take a keen interest in the size of the domestic market of a particular country before they invest their money. A huge domestic market means that the services and products offered by the investors can reach higher volumes and turn profits sooner provided they can capture a market segment.
Stability of the Macro-economy and exchange rates
As per statistical data, it is found that up to 30% of investors find a country suitable for investment in case its macroeconomic conditions are stable. A steady and favorable foreign exchange rate also plays a crucial role in ensuring FDI.
Regulatory and Legal Environment
A country that puts minimal legal and regulatory hurdles in the paths of investors is the one that see maximum growth in FDI. India with its recent set of reforms is providing a transparent and easy process which is a preferred attribute among investors.
Labor and Infrastructure
One of the most significant contributors that assist a country in seeing maximum growth in FDI is readily available skilled labor and up-to-date infrastructure. India’s supply of skilled labor is growing at a rapid pace and large investments are being made in upgrading infrastructure nationwide.
Concluding Remarks
India’s macroeconomic fundamentals are stable, and the overall pace of economic growth is due to the reforms that have been put in place over the last decade or so. With efforts being made by the Government of India to ease the regulatory environment, overall it is evident that good times lie ahead for FDI in India.
