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Why Invest in India?

October 12, 2011

These days, India is the place to be, with its rapidly growing economy, thriving population and fast paced development; it’s definitely the best emerging market. The Indian economy is starkly different from what it was even a decade ago and is now on a growing curve which is rapidly rising. Today, the Indian economy has a considerable and stable growth rate, great foreign exchange reviews and capital markets which are flourishing.

A clever investor will therefore see this as the golden opportunity that it really is and invest in the Indian economy because the returns are going to be nothing short of phenomenal. Even a decade ago, foreign investors were not being welcomed into the Indian market, but things have changed quite a bit since then because of the phenomenon of rapid globalization.

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Government Incentives

The long term capital gains for foreign companies have been reduced to twenty percent! Previously, there used to be a ban against the use of foreign trademarks and brand names. But this has been removed. Now foreign trademarks can be used within the country freely. Moreover, the Indian budget has been steadily lowering the tax rates for foreign companies over the years. Both types of firms – Indian as well as foreign – have been exempted from paying export earnings!

In short, the government is making up for all the lost time it spent in driving away foreign investors and doing everything it can to invite them. The Securities Exchange Board of India (SEBI) has recently come up with guidelines which are nothing, if not encouraging toward foreign brokers. With the help of this, Foreign Brokers can now choose to set up Rupee or foreign currency denominated accounts to credit fees, brokerages and other expenditure of similar nature; indirectly facilitating online investing in India easy.

India has a very bright future ahead because of the fast paced development that the country has been going through. Another reason why foreign investors should invest in the country is the sheer size. It has a GDP of 1.3 trillion US dollars currently and that is saying something! This makes it the eighth largest economy in the world.

If the Low cost base is taken into account, then the GDP actually trebles, making it about 3.8 trillion US dollars. And it is soon set to be among the top three economies in the world – after the US and China, considering these PPP terms.

Economy and Population

The fast growth in India’s economy, despite the recession is another reason why foreign investors find it so attractive. It is growing at a steady rate of 8.75% and this growth rate is set to increase by 9 to 10% every year for the next decade or so. These figures are really impressive because India is showing a great resilience in the face of global recession which has hit the top economies of the world.

The Indian economy also offers high savings. The average rate is about 37% of the GDP which is quite a lot. The domestic savings meets most of India’s investment requirements and just about 20% of India’s total public debt is sourced from foreign borrowing!

India is also a relatively young country with an average age of just twenty five years. Investing in a thriving, bustling economy like this, full of young blood is sure to bring back sizeable returns. Over the next two decades, India’s working age population is set to reach an all time high of two hundred and forty million. The workforce is an extremely talented one, with a high degree of morals, integrity, skills in English and of course entrepreneurial skills. So if you are looking to invest, invest in India!

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