Doing Business in India

Doing Business in India
India is among one of the most preferred destinations for investors who are planning to set up shop oversees. According to the ATKEARNEY Business Confidence Index of 2007, India is the second most attractive destination for doing business. According to Goldman Sachs, the Indian economy is expected to continue growing at the rate of 5% or more till the year 2050. A PriceWaterHouseCoopers report suggests that India will be 90% of the US economy by the year 2050. All these predictions along with several others make doing business in India a very viable option.

A glance at the basic economic statistics of India:

GDP at current prices (2007-08): $ 1.16 trillion
GDP (PPP) (2006) = US $4156 (5th largest in the world)
GDP growth rate (2007-08): 9%
Exchange rate: Rs. 46.45017/$ (as on November 10, 2009)
Foreign Exchange reserves: $ 285.5 (Oct 2009)
Exports (2007-08): US $159 billion, Growth Rate: 25.8 %
Imports (2007-08): US $239.65 billion, Growth Rate: 29%
Foreign Direct Investment (2007-08): US $32.44

Despite the turbulent market conditions, doing business in India is an opportunity for investors to capitalize on the huge opportunities available in the country. The United Nations Conference on Trade and Development (UNCTAD) in their new report on world investment prospects titled, ‘World Investment Prospects Survey 2009-2011’, India has been ranked third in global foreign direct investments for year 2009, following the economic meltdown. Also India will continue to remain among the top five attractive destinations for international investors during the next two years.

The huge spurt witnessed in the Indian economy has largely been due to huge investments from investors abroad. In 2008, these investments accounted for 39% of the country’s Gross Domestic Product (GDP), which is an increase of more than 20% from the last five years. The Government has undertaken several steps to ensure that the whole process of setting up and doing business in India is a smooth affair. Reformed governmental policies provide investors with opportunities like freedom of entry, investment, location, choice of technology, production, import and export. Many multi national firms have set up their offices throughout India, while there are several companies waiting in the pipeline.

Business investments in the pipeline:

German luxury car manufacturer, Audi, is looking to higher sales this year than the previous target of 1,500 units. The Aurangabad plant is set to get a new assembly line as part of its US$ 42.83 million investment in India

Japanese tyre manufacturer, Bridgestone is set to start a second plant near Pune at an investment of about US$ 420.72 million.

PepsiCo is increasing investments in its Indian beverage business in 2009 to over US$ 220 million.

Mexican cinema chain, Cinépolis, is set to invest around US$ 163.1 million in south India. The company has earmarked US$ 346.57 million for its expansion plans in the country.

German carmaker, Volkswagen will invest US$ 453.66 million for expanding the Chakan plant.