India being the world’s seventh-largest economy, with a population of over 1.3 billion people, offers immense potential for investors seeking growth opportunities. With passage of years, it has emerged as a country with stable economic policies, huge skilled workforce, and its expanding consumer market. This has made it a favourable destination for investment. In this blog, we will discuss three credible reasons why India is a great country for investment and growth.
Strong Economic Growth and Market Potential:
The economical trajectory has been on a steady growth path in the last five years. It has shown significant development due to the various initiative taken by the government in policy and structural reforms. A brief overview of its steady GDP (Growth Domestic Product) with some fluctuations:
2016-2017: 8.2%
2017-2018: 7.2%
2018-2019: 6.8%
2019-2020: 4.0% (affected by the economic slowdown and COVID-19 pandemic)
2020-2021: -7.3% (affected by the COVID-19 pandemic)
(Source: Reserve Bank of India)
It has been able to maintain a steady average of 7% with the enforcement of policies like Goods and Service Tax (GST), Make in India, Digital India to name a few.Implementation of GST has simplified the tax system eliminating interstate barriers which made easy movement of goods across state borders. The GST system mandated business owners crossing certain threshold to get themselves registered, thus expanding the taxpayer base which resulted in increased revenue. Besides, the unified tax system gave a boost to manufacturing and export especially in the textiles, automobiles, and pharmaceutical sectors by providing tax incentives. The Make in India campaign launched in 2014 with the objective of promoting Domestic Manufacturing leading to create employment and attracting Foreign Investment (FDI). FDI norms under the sector specific reforms made business regulations easy, improved the infrastructure for business and opened doors for innovation and research. The Make in India campaign has focused on Skill development, Vocational trainings, and Entrepreneurship to intensify job creation.
Skilled Workforce and Innovation:
India boasts of a young and dynamic workforce thus becoming an irresistible talent acquisition destination for both national and global companies. It being one of the countries with largest youth population of over 600 million below the age of 25 years (Source: Census of India).
Let us also look at these statistics: India produces more than 1.5 million engineering graduates and over 1 million management graduates annually. (Source: National Institutional Ranking Framework) Along with these two fields it also is producing highly capable and efficient graduates in the field of Science, Technology, mathematics (STEM) fields making it a sort after nation for talent. The Government’s ongoing “Skill India” initiative aims to skill people by focusing on creating a workforce aligned with industry requirements. Thus, providing a skilled workforce that is highly adaptable and proficient in the latest technologies. Moreover, it is also emphasising on promoting Entrepreneurship and the Startup ecosystem which has led to innovative startups across various sectors. Many multinational companies are investing in research and development set up to boost the creativity and innovative ideas of the skilled workforce.
Supportive Government Policies and Reforms:
Prime Minister’s vision of bringing India’s economy to USD 5 trillion dollar by 2024 – 25 is coming true. It is known fact that a growth in the economy is indicative of job creation.
Introduction of reforms like Goods and Services tax (GST), Make in India, Digital India and many other policies has improved the business climate. These reforms have opened the gates for Foreign Direct Investments, as well as for our own large and growing Consumer Market. It also has simplified business processes, reduced red tape, thus giving significant opportunities to businesses in assorted sectors like
retail, e-commerce, health care and financial services. Some of the key policies implemented to facilitate ease of investment and attract foreign capital:
Liberalization of FDI Regulations:
Under this regulation, the Indian government has evenly liberalized foreign direct investment (FDI). This regulation allows higher FDI limits and simplifying procedures across various sectors thus encouraging foreign investors to explore investment opportunities in India.
Many countries like Japan, USA, Singapore, United Kingdom to mention a few have invested in various sectors of technology, manufacturing, healthcare, and financial services. They have invested in infrastructure development projects (key contributor in the DMIC- Delhi Mumbai Industrial corridor), setting up innovation hubs, research centres, Startups, thus capitalizing the skilled workforce and growing market.
Make in India and Manufacturing Incentives:
This campaign aims to promote domestic manufacturing and attract foreign investment. Under this campaign investors are offered incentives such as tax benefits, ease of land acquisition, and streamlined regulatory procedures for setting up manufacturing units in India.
Single Window Clearance:
Single Window Clearance reform was established with the objective of creating a single window for clearances and approvals of industry in the country. Its creation provides end-to-end facilitation support, including pre-investment advisory, information related to land, banks, and facilitating clearances at Central and State level resulting in the minimisation of bureaucratic hurdles.
Digital Initiatives:
Initiatives like “Digital India” and the digitization of government services have enhanced transparency, reduced paperwork, and improved efficiency in interactions with government departments. This has simplified administrative procedures for businesses, including the registration process, obtaining licenses, and filing taxes. Additional, initiatives like the National Investment and Infrastructure Fund (NIIF) and the establishment of dedicated investment corridors and industrial clusters have provided a conducive environment for domestic and foreign investors.
Conclusion:
India has become an attractive investment destination because of its strongeconomic growth, skilled workforce, the new and revised government policies, and reforms. It has opened doors for investors who are seeking for long-term growth. With its seamless efforts in embracing technology, investors are coming forward to invest after thorough research of the local market, understanding the needs and available resources in various sectors such as manufacturing, health care, renewable resources.
Investors can harness India’s potential of a promising growing economy with good planning and partnerships. They can contribute to the growth of a New India while reaping substantial rewards for themselves.
