Potential of the Indian Market for Foreign Investment

Potential of the Indian Market for Foreign Investment is huge due to the fact that the country's economy is on the rise. The high Potential of the Indian Market for Foreign Investment has helped to attract huge amounts of foreign direct investment into the country.

Indian economy:

The economy of India is the fifth largest in the whole world. The Indian economy is also the second largest among all the developing nations in terms of consumption power. The Indian market is such that it offers very high prospects for earning and growth in almost all the sectors of business.

The huge market potential in India, with prospects of high profitability, was aptly complemented by regulatory measures by the Indian government in the early 1990s. The incentives to Foreign Investment in India were increased significantly over the years.

Factors attracting foreign direct investment in India:

Various factors that are attracting foreign direct investment in India include, large and growing middle class population in the country, majority of the workers are educated and can speak good English, and the wages are also low. A potentially huge market capable of yielding much higher returns than in other countries has been a major attraction for foreign investors. All these factors have helped to increase the Potential of the Indian Market for Foreign Investment.

Sectors of the Indian market having potential for foreign direct investment are:

• Services
• Telecommunications
• Food processing industries
• Metallurgical industries
• Drugs and pharmaceuticals
• Transportation industry
• Chemicals
• Cement and gypsum products
• Electrical equipments

Increasing the Potential of the Indian Market for Foreign Investment:

Initiatives that can further increase the potential of the Indian market for foreign investments are -

• Further developments in infrastructure.
• Simplification of FDI process.
• Reform measures.

Last Updated on 05/07/2011