Advantages of Investing in India

India has a 20 million-strong scientific and technical manpower, more than the population of
Taiwan. 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 with
substantial purchasing power and another 700 million-strong population whose capacity to purchase
is gradually increasing. Being a vibrant democracy with a large democratic set-up supplemented by
a broad-based legal framework including arbitration and an independent judicial system, it boasts
of a vast network of bank branches, financial institutions and well-organized capital and money
markets. These attributes make India a favorable destination for NRI investments.
India also has a huge network of technical and management institutions of the highest international
standard for development of excellent human resources. India has an enviable record of honoring
its international financial obligations and has never defaulted. The country has a strong English
language base for business purposes. The strong and vibrant small-scale sector is good enough for
establishing strategic alliances with its foreign counterparts. The strategic location of the country
in the context of the third world markets particularly the rapidly growing South and South-East
Asian 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 in
India, there were 20 billionaires, according to the Forbes magazine. India has emerged as the
world’s fastest growing wealth creator, thanks to a buoyant stock market and higher earnings. A
number of Indian companies surpassed last year’s net profit in just six months of the current fiscal,
reflecting accelerating corporate earnings. 44% percent of the top 100 of the Fortune 500
companies are present in India. With its manufacturing and service sector on a searing growth path,
India’s economy may soon touch the coveted 10 percent figure.
The Indian diaspora’s business has turned hot of late. Government has always wooed non-resident
Indians assiduously to attract more inflows. Apart from the money transfer business, which
compared to money invested in India is smaller; the Centre is trying its best to persuade NRIs to
pump money into the country like never before. And, it has seen superlative success in re-cent
years. 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 jobs
skyrocketing, there is scope for more money coming into India. According to a recent Business
Standard report, in the last three years, 850,000 people went to West Asia alone. And even as the
official figure for Indians living in the US is put at 2 million, unofficial estimates put it at 3.5
million. And emigration to Canada and Australia continues to grow.
The ministries concerned have made sure that rules and regulations are simplified to make inflows
easier. Where does the government see money being invested? Investment in bank deposits and
company deposits may be made by NRIs.They are subject to different rules; investments with and
without repatriation facilities are permitted under the schemes. As of now, NRIs are permitted to
make direct investment in partnership and proprietorship firms in the country. This, the NRIs can
do by way of subscription for shares or debentures of Indian companies. Further, they can also now
place funds in company deposits. NRIs who undertake not to seek at any time repatriation of the
capital invested in India and the income earned thereon are permitted to invest on non-repatriation
basis. NRIs also have the option of investing in mutual funds floated by domestic public sector and
private sector mutual funds on non-repatriation basis. All they have to do is to make their
applications 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 the
Securities and Exchange Board of India (Sebi), the market regulator. Yet another option is to invest
in the securities of the Central or State governments and the National Plan/Savings Certificates by
making remittances from abroad or out of funds held in their NRE/FCNR accounts. In effect, with
regulations tapering off, compared with the scene some 7-8 years ago, non-resident Indians today
have more choices to invest their hard-earned money in India. And, to make things easier and
hassle-free, the government is doing all it can to persuade Indians who make big money away from
home to park their funds here. Commendable though is the fact that the Indian diaspora has also
begun to believe that it is better to channel their money home, thereby contributing to the
development process of the nation they actually belong to.