September 17, 2018

India a preferred FDI destination

 

Source: www.rbi.org.in


The Indian economy is largely an agro-based economy, being a land of farmers. Tractors and other scientifically advanced farm equipment are rampantly visible on the Indian agricultural farms which have replaced the traditionally used cattle and primitive methods. With the changing times and increasing acceptance of science and technology, there has been a rapid growth and development of the industrial sector. The service sector including construction, trade, commerce, banking system etc. has also seen a sufficient rise. In the past few years India has witnessed an overall improvement in the socio-economic structure covering essential facets such as education, health, housing power, energy, transport, communication etc. Having a mixed economy structure, India offers the upliftment of both public and private sectors of the country.

Investment in India – A favourable option

India remains a preferred destination for foreign direct investment (hereinafter referred to as “FDI”) as domestic consumption remains strong, according to the Reserve Bank of India’s Annual Report.[1] In the environment of a strengthening global economy, a cyclical rebound in world trade and generally buoyant financial markets, the Indian economy in 2017-18 turned in a resilient performance that was also entrenched in macroeconomic stability.

Manufacturing activity is gathering momentum on the back of new business, both domestic and export orders, rising capacity utilisation and drawdown of inventories. Therefore, Indian industrial as well as corporate structure has showed increased pace of progress making it a favourable investment destination.

With the ongoing policy reforms in sectors ranging from single brand retail trading, civil aviation, real estate broking service and simplification of legal and regulatory system, India moved into the top 100 countries in the World Bank’s Ease of Doing Business global rankings. Additionally, the Government has liberalized its policies with a view to attract more investment opportunities in India.

Owing to the investment favourable conditions, India received USD 37.3 billion capital inflow in 2017-18 as compared with USD 36.3 billion in the previous fiscal, thus increasing the foreign direct investment in the country.

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[1] https://www.thehindu.com/business/Economy/fdi-india-remains-top-destination/article24813050.ece

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