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Post liberalization India has become a favorable destination for International investments. The article provides information on the various factors which has resulted in business opportunity in India.

Business Opportunities in India

India is the largest democracy in the world. In terms of population it ranks second in the world. The policy of liberalization pursued by the government after 1991, has transformed the prospects for the Indian economy. Today India is one of the favored destinations for global investments.

The government has come up with several incentives like import of capital goods at concessional customs duty (under condition it fulfills certain export obligations), liberalization of external commercial borrowing norms, tax holiday to encourage investments. Sectors like automobiles, chemicals, food processing, oil and natural gas, petrochemicals, power, services and telecommunications have witnessed tremendous investments.

Business Opportunities in India
There are several factors which create favorable business opportunities in India.
  • India has a huge middle class, with improved purchasing power, due to the high growth in the economy. Increasingly Indians have become more brand conscious, resulting in increased growth for the retail sector.
  • Presence of vibrant trade links with South Asian Association For Regional Cooperation (SAARC) nations like Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
  • Improved infrastructure available for business ventures. India's competitive advantage in Information Technology can be used to enhance productivity in Industries.
  • Availability of huge pool of technical manpower has heralded the expansion of manufacturing base across different industries.
  • India is rich in natural resources and self sufficient in agriculture.
  • A well established banking system consisting of public and private banks and other financial institutions.
  • The capital markets in India are one of the fastest growing markets in the world, attracting huge investments from FII's.
  • The economic reforms have brought in policy changes in terms of freedom of entry, investment, location, usage of technology, import and export. These changes have created an investment friendly environment.
  • India is a well established democratic country, with free and fair judiciary.
  • A considerable section of the population is proficient in English.
Investment Policy

The procedure for FDI in India has been simplified through the automatic route.

All items/activities come under the purview of automatic route, except the following.

Any proposal that requires an Industrial license. An Industrial license is required if
  • The said industry is covered by the Industries act 1951.
  • The proportion of foreign equity is more than 24 per cent of the equity capital of units manufacturing products set aside for small scale industries.
  • All applications, wherein the foreign collaborator has a previous business tie up in India (except IT sector).
  • All ventures to acquire shares by a foreign investor in an existing Indian company.
Any investment in public sector units. Export Oriented Units (EOUs), units in Export Processing Zones (EPZs), Special Economic Zones (SEZ), Software Technology Parks (STPs) and Electronics Hardware Technology Parks (EHTPs) come within the purview of automatic route.

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