INDIA AN INVESTMENT DESTINATION

Presented by satish 241

Overview

• What India offers• Booming Indian economy• Policies , that helps MNCs to grow in India • India’s advantages• Investment way

What India offers

• Second largest emerging market• Tenth largest economy, a safe place to do business• Largest reserver of skilled and semi skilled manpower• Largest democracy , political stability• Long term sustainable competitiveness, high growth rate

economy• Liberal and transparent investment policy• Highest return on investment

Booming Indian economy• Huge domestic consumer market

• Increasing its purchasing power

• Increase in consumerism and brand consciousness

• More than 50% of Indian are under age of 25

• Reserve of natural resources-oil ,gas, coal, iron ore, and other minerals

• Increasing agriculture contribution in GDP

Policies that help MNCs to grow in India

• FDI Policy: Most sectors including manufacturing activities permitted 100% FDI under automatic route (No prior approval required• Industrial Licensing : Licensing limited to only 5 sectors (security, public health & safety considerations)• Exchange Control: All investments are on repatriation basis• Taxation: Companies incorporated in India treated as Indian companies for taxation

India as an advantage

• Provide a climate for R&D to create domestic products and generate local demand

• Focus on current incentive policies to make them more attractive • Continue the investments in improving infrastructure for

transportation • Supply of quality manpower • Technology development• Geographical Clustering• Easier access to capital

Fastest growing sectors

• Automobile • Ninth largest industry in the world• Asia’s fourth largest exporter• Revenues- $34 b in 2007 estimated to $145 b in 2016• Becoming a sourcing hub• Likely attracting investment of $60.7 b by 2012

• Health & pharma India’s pharma market ranked fourth Expected to grow at 12-14 % p.a. against global growth 4-5 % The industry will touch $16B by 2015

• Telecommunication one fastest growing sector with rate of 9.91% in country Investment is required in manufacturing facilities, supply

of hand set and equipments and value added services

Power generation fifth largest power producer in the world Total power capacity is more than 145000MW Yet power deficit of about 16% India hopes to add 78000 MW capacity by the end of 2011-12 Much of this will be private-funded and managed

• Retail• Indian retail industry ranked 2nd

• Domestic retail market is $533b and growing 4-6%• organized 7% of $8b expected to reach $24b by 2015• India permits 51 per cent foreign direct investment (FDI) in single brand segment.

• IT• The Indian IT industry is growing at 21 per cent per annum• There is more balancing in the BPO industry• Software & Services will contribute over 7.5 % of the overall GDP growth

of India • IT Exports will account for 35% of the total exports from India • Potential for 2.2 million jobs in IT by 2010• IT industry will attract Foreign Direct Investment (FDI) of U.S. $ 4-5 billion • Market capitalization of IT shares will be around U.S. $ 225 billion

• Agriculture• the turnover of the total food market is approximately

Rs.250000 cr.• The Government of India has also approved proposals for

joint ventures, foreign collaborations, industrial licenses and 100% export oriented units envisaging an investment of Rs.19100 cr.out of which foreign investment is over Rs. 9100 cr.

• other sectors Airport and ground handling Mining and mineral Pollution control OIL &GAS

Investment wayForeign Direct Investment

• FDI is allowed in almost all sectors; FDI is not allowed only in certain specified categories of industries

• There are two routes for FDI approvals

Foreign Investment Promotion Board route (FIPB route)

The Automatic route via Reserve Bank of India ( RBI )

• Sectoral caps on FDI limits (for both automatic and FIPB route) have been prescribed for certain industries. In most cases, FDI upto 100% is allowed

FIPB Route / Automatic Route

FIPB route

• FIPB is in the Ministry of Finance, New Delhi

• FIPB decides on proposals within 30 days

Automatic route• Automatic route is governed by Reserve Bank of India (RBI)

• Certain requirements relating to inward remittance of foreign exchange to be adhered to RBI

• Within 30 days of receipt of remittance and 30 days of issue of shares to foreign investor, certain documents to be filed with the concerned RBI regional office

FII

• At the end of July 2009, net inflows from FIIs stood at US$ 7.3 billion

• India’s foreign investment policies allow foreign institutional investments of 23 per cent in stock exchanges.

• FIIs and the non-resident Indians (NRIs) are allowed to invest in Indian Depository Receipts (IDRs),

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