This, because the domestic and foreign investment in Indian industries has seen a sharp rise in the past 2 years. What made the world shift and take notice of India, and consider it as the next ideal destination for investment in strategic growth of important global industries? Read on to know.
India is one of the fastest growing economies in the world
In its mid-year update of the world economic situation and prospects, the United Nations (UN) had said that India is set to become the world’s fastest major economy with a growth forecast of 10.1% in 2022.
Further, Nomura has said that the country is on a cusp of cyclical recovery and become the fastest growing Asian economy, eclipsing China and Singapore.
The reason behind the positive outlook towards India’s growth is the government’s thrust in improving the infrastructure of the country, making the country self-reliable on the manufacturing front and the roll out of the world’s largest vaccination drive to inoculate the citizens against Covid-19.
Rise in global competitiveness and innovation
India continued to maintain its 43rd position on the Global Competitive Index, third year in a row. This, thanks to the stability maintained in the public finances despite a pandemic raging around the world and in the country.
While on the Global Innovation Index, India climbed 4 places to 48th position and ranked on top in the central and southern Asia region.
These rankings are determined on the basis of the efforts put in by the country in improving its education, infrastructure, ease of doing business and the political environment.
An alternate and ideal manufacturing destination
India’s economic influence in the Asia Pacific region and all over the globe is seeing a great surge.
The Covid-19 pandemic struck the global supply chain when international borders were shut and China, one of the world’s biggest manufacturing hub, became the epicenter of the deadly virus.
This forced the world to look at alternate options for manufacturing to hit the ground running as soon as the lockdowns were to be lifted. And India came out to be the ideal option for it, as the country has over the years stepped up its efforts to attract manufacturing investments.
And with the recently announced $6.6 billon incentive scheme to boost electronics manufacturing sector in the country, global smartphone manufacturers like Foxconn, Samsung and others like Wistron and Pegatron are already on the route to “Make in India”.
During 2020-21, the FDI into the country rose by 19% to $59.64 billion. Further, the total FDI (including capital, equity and invested earnings) rose by 10% to $81.72.
This, because Prime Minister Modi’s business and global diplomacy initiatives has highlighted the country being a young nation with a workforce raring to go, and its open support and invitation for the global private sector giants to establish their base in India.
Further, India’s liberalized FDI norms have opened up many industries to the world. Below are the sectors that has up to 100% FDI allowed through the automatic route and government routes:
Air transport services – [Upto 49% automatic + above 49% and up to 74% government route. Upto 100% automatic route for NRIs]
Private sector banking – [Upto 49% automatic + above 49% and upto 74% government route]
India is truly a bull on the rise, not just in Asia, but globally. With its growth focused initiatives for its citizens and economic policies that takes the world along with it, India is indeed the next ideal investment destination.
We are an Ahmedabad-based investment and financial advisory firm helping individuals, families and businesses in effectively and efficiently managing their finances, investment and further growing their wealth.