04 November, 2007

Best to Investment in India !

India has become a prospective destination for Foreign Direct Investment (FDI) and joint ventures. The Indian economy is well suited to the small and medium American companies which may find it difficult to operate in the saturated western markets. With the vast technical and managerial skills available in India, Indian and American Small and Medium sized Enterprises (SMEs) can join hands both as complementary and supplementary partners to cater to the vast Indian market. India has emerged as a low cost base, attractive enough for multinationals to open shop in the country. More than 100 of the Fortune 500 companies have a presence in India, as compared to only 33 in China.

Repatriation of profits in India is freely permitted. According to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) a few months ago, 70% of foreign investors were making significant profits and another 12% were breaking even. FDI policies in India are among the most liberal and attractive among emerging economies. The policy initiatives taken by the government in specific sectors such as telecom, ports, airports, railways, roads, energy, and construction development aim at improving competitiveness within the Indian economy. Further, lucrative investment opportunities are being offered to investors though tax incentives and customs duty concessions for import of plant and machinery needed for the projects. Special Economic Zone (SEZ) Act is also in place to facilitate this process. Slowly but surely, India is competing well with others in sectors like auto-components, chemicals, apparels, pharmaceuticals, and jewelery. More than a dozen Indian companies are among the top five global producers in their respective product categories. To sum up, best investment in India would be such that would create employment and bring in technology and not just investment that would replace the mammoth labor force of the country.