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India- the emerging market

India surpasses all other countries in its capacity to hold businesses of any kind. Thanks to the 1.5 billion population in which more than 300 million belong to the educated middle class. Surprisingly, there remains 70% of the entire population of India untapped, giving a golden opportunity to foreign investors. The stable financial market and the powerful judiciary are the additional factors that encourage many foreign entrepreneurs to set up their bases in India.

The investment-friendly land

The Government of India has long realized the potential of the land to emerge as the leader in the global economy. Being a powerful member in the WTO, India is recognized by many foreign countries that take deep interest in flourishing in this land of opportunities. The government gives a lot of emphasis to foreign investment sector, calling foreign investors to invest their money in order to improve the business and at the same time to build a healthy relationship between the two countries. With a view to these, a lot of developmental activities such as improving the infrastructure of the entire country have been carried out in the recent past. Above that is the investor-friendly policies adopted by the recent governments with complete focus given to the economical empowerment of the country. The government now allows 100% foreign equity in many sectors, apart from allowing special investment benefits for certain selected areas of businesses including power, software, and many export-oriented businesses.

RBI Automatic Approval

Getting an automatic approval from the Reserve Bank of India (RBI) is quite easy for foreign investments. The following are the various businesses that can procure automatic approval from RBI

• Investments up to 50, 51, 74, and 100% made in selected prime businesses.
• Fully Export Oriented Units (EOU) and those export units established in the selected Export Processing Zones.
• Technology agreements that fall under certain selected category.

Starting business activities in India

For the past few years, India has been attracting foreign investors for flourishing business activities. Gone are the hostile investment regulations and the closed economy that prohibited any kind of foreign investments. The present scenario promises a green pasture for setting up any kind of business activities. No wonder, India has been rated as one of the most dynamic markets of the world in terms of business development.

There are two important factors that determine the future of business in India - first, the entrepreneur and second, the investment resource. An entrepreneur can contour the business activities effectively in the Indian market perspective. The bilateral agreements between India and other nations have to be considered while investing in a business, and thus the source of investment plays an important role in it. There are many areas of businesses such as infrastructure, telecommunication, IT, retail, etc., where the Government of India has consolidated the foreign investment policies as these are the prime sectors where foreign investment demands are much higher compared to other sectors.

It is estimated that India can produce about one million jobs every year, and it has the potential to attract more than US$100 billion investment in the coming five years, in which US$11billion can be contributed in the export sector alone.

To summarize, the following can be attributed as the prime reasons for accepting India as the global market. Infrastructure development, especially in the main cities.

• A large number of educated middle-class population that yields cheaper manpower.
• The largest democracy of the world
• Growing economy and improved standard of living