Foreign investment in India is one of the most popular route for interested investors looking to set up their business in India as the country has become a key market for most foreign businesses. International Investments has played a key role in formulating future policies of the Indian Government.

FACTS

Official Name: Republic of India,

Capital: New Delhi

Population: 1,236,344,631

Official Languages: Hindi, English, 21 others

Currency : Rupee

Area: 3,287,590 square kilometers

Major Mountain Range: Himalaya

Major Rivers: Ganges, Yamuna, Indus, Brahmaputra

Presently the dynamic Indian business society is undergoing transformation at a tremendous pace.The investment sector is offering a favourable atmosphere to willing investors looking for Foreign Direct Investment in India.The equity market in India according to the Asian Development report has emerged as the third-largest equity market.India has secured 3rd position amongst countries for inbound investments.

The economy of India is considered amongst world’s leading economy.Well designed and liberal business policies for foreign investors have motivated the international business society to focus on India and invest in business opportunities.Government of India efforts has played an important role in attracting and promoting global investment specially in order to supplement domestic capital, technology and skills, for swift and rapid economic growth.

India undoubtedly has one of the swift flowing service sectors in the world with an annual growth rate above 9% (since 2001) which too an extent is facilitating investment opportunities. India with a large pool of skilled talent,well trained experienced professionals in industries like I.T, Engineering, Banking,Hospitality,Retail etc have made it possible for foreign investors to run a successful and profitable venture in India.

To engage in a business operation in India and to set up a legal entity in India requires specialised expertise and deep understanding of the Indian laws.Our company working for more than 13 years, can help our esteemed clients understand the benefits of foreign direct investment in India.

Our team of experienced and qualified staff are dedicatedly working round the clock to provide quality services to our foreign clients so that they can set-up their ventures in India ,as we have a strong network of associates across the globe

1.India is growing as one of the top most destinations for foreign investors

• Foreign investors in India will greatly benefit as India is becoming a popular destination for foreign investment because of its liberal foreign investment policies & has been rated consistently amongst the world’s top three destinations by global bodies such as the World Bank.
• Foreign investors can greatly benefit as the capital gain or dividend arising for the underlying shares will completely belong to the investors.International Investment and economic growth in India has shown rapid growth and remarkable resilience especially in commercial development of the nation. Recently the Indian stock market has reclaimed its old position in the year 2017 as they have taken their net investment position in equities to Rs 55,000 crore, the highest in three years after Rs 20,500 crore in 2016 and Rs 17,800 crore in 2015.
• Foreign investors can benefit greatly as they can invest in Indian market without registering with SEBI. Morevoer Foreign trade has witnessed swift growth in key sectors like services and telecom where the overall foreign investment inflows have increased by 9% to $43.5 billion. According to data of the Department of Industrial Policy and Promotion (DIPP) the service sectors like banking, insurance, research and development, have received huge foreign direct investment (FDI) worth $6.89 billion in 2015-16.
• Foreign investment will help investors find a global market for its products in India. Foreign investment in Indian history has proved that government is taking proactive initiatives to attract global investments.The records of 1999-2004, shows that India has received USD 19.52 billion of foreign investment which increased to USD 114.55 billion between 2004-09 and further jumped to worth USD 60.1 billion in 2016-17, which was  all-time highest foreign investment in India.

2.Reforms in FDI policy

• Recently Government of India has taken bold and positive initiatives to promote inbound foreign investment as most sectors have been freed and has been made open for foreign investment in India under the automatic route.The government stance regarding investment is quite investor friendly, which is not only promoting future investments but also facilitating country’s economic growth.
• Foreign Investors in India can expect and see a growing India that will certainly grow in the years to come and become an attractive destination for foreign investment.The World Bank prediction of GDP growth in India at 7.6 per cent for the year 2016-17, coupled with growing reforms for FDI policy will make it possible.

3.Investment Opportunities

Foreign investors greatly benefit from FDI as the Government of India has taken significant initiatives and have introduced attractive schemes and policies from time to time for investing in India.

The ministries of different industries have taken special measures in relaxing the rules and regulations related to foreign investment mainly to strengthen the country’s economy for making it one of the strongest economies in the world.

• India has made impressive strides on the agricultural front during the last three decades as Agriculture contributes 14% to the GDP and employs almost two-third of the population.
• India is the fourth largest producer of coal in the world. In the manufacturing industry, textile industry plays a predominant role.
• Chemical industry is the second largest industrial sector(12% of the GDP).
• The telecommunication sector is expanding

4.High Potential Sectors

The government of India is taking various initiatives including relaxation of FDI norms which is making it easier for foreign companies to do business in India.It has taken steps which has made possible implementation of best investment options in India.The sectors of foreign investment are as follows;

• Airport & Ground Handling,
• Computer and Peripherals,
• Education Services,
• Electric Power & Transmission Equipment,
• Food Processing,
• Machine Tools,
• Medical Equipment,
• Mining & Mineral Processing Equipment,
• Oil & Gas Field Machinery,
• Pollution Control Equipment,
• Safety & Security,
• Telecommunications Equipment,
• Textile Machinery,
• Water and Sustainable energies.
• And many more…………………………….

5. Privatization Programs

• India has been privatising its public sector: like telecommunications, public infrastructure, airways, ports, etc which is proving beneficial for investors looking for investing in India.The department of disinvestments is looking after the privatisation programme in the country.

• According to FDI policy, Govt of India gives permission to a non-resident entity to invest in India, provided they are not citizens of Pakistan and Bangladesh.An entity incorporated in Pakistan or Bangladesh can only invest subject to prior approval of FIPB).
• NRIs citizens and residents in Nepal and Bhutan have the necessary permission by Government of India to invest in the capital of Indian companies on repatriation basis.
• Overseas Corporate Body s which are integrated outside India and are not under the adverse notice of RBI are allowed to invest in Indiaas per FDI Policy with formal permission from Government of India and RBI as required

Mostly foreign companies greatly benefit from FDI as they not only get best investment options in India but also excellent service and value for the money they invested. Moreover the financial institutions, and a well-organised capital market contribute greatly in making India a potential destination for foreign investment.

There are two routes for investment in India-Automatic Route and Government Route.

• Automatic Route-For setting up a company the concerned foreign investor or the Indian company requires no precise approval from the esteemed Reserve Bank or Government of India under the Automatic Route.The investors are required to inform duly the Regional office(RBI) within 30 days of receipt of inward remittances and are expected to file the required documents with the office within 30 days of issue of shares
• Government Route-Few FDI require prior Government approval. Such company registration proposals are considered by leading govt bodies that include the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs, and Ministry of Finance and accordingly they give their clearance to investors if they are satisfied with the proposal for investment in the country. Application can be made in Form FC-IL

Foreign companies interested in investment plans in India can commence operations in India by incorporating a company under the Companies Act, 1956 through:

1. Joint Ventures

2. Wholly Owned Subsidiaries

AS A FOREIGN COMPANY

Company formation can be done easily and investors can set up their operations in India through:

• Liaison Office/Representative Office
• Project Office
• Branch Office

Such offices can undertake any permitted activities.Companies registration has to be done with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.
OTHER CONCERNS

OTHER CONCERNS

Foreign investment in other concerns like not for profit organizations etc are also subject to provisions of Foreign Contribution Regulation Act (FCRA).

Foreign direct investments are prohibited in the following sectors:

• Lottery Business including Government / private lottery, online lotteries, etc.
• Gambling and Betting including casinos etc.
• Chit funds
• Trading in Transferable Development Rights (TDRs)
• Real Estate Business or Construction of Farm Houses
• Manufacturing of cigarettes, or tobacco or of tobacco substitutes

• The most important and attractive incentives to investors is the Fresh shares that can be issued by an Indian company according to FDI policy to a person resident outside India (who is eligible for investment in India), specially for setting up a company with foreign investment.
• India is an attractive destination for foreign investors compared to other major countries,because Foreign investors can invest in Indian start-ups by purchasing/acquiring existing shares from Indian shareholders or from other non-resident shareholders.
• A resident in India can transfer through sale,or shares of an Indian company  to a person resident outside India, provided they follow the guidelines.This greatly benefits foreign investors in India.
• Acquisition of shares under the FDI scheme by a non-resident on a recognized Stock Exchange

Incentives for Foreign Investors in India include:

• Duty free import and domestic procurement of goods for the manufacturing and assembly of its products within the Special Economic Zone.
• 100 percent valued-added tax (VAT) rebates upon export of components sourced in India
• Income tax exemptions (these vary dependent upon the business scope and location in India, but can be substantial).

To know more about the investment opportunities in India, please connect with our company for more information. Our years of combined experience, global network, efficient team members will help you throughout the process in identifying FDI opportunities and help you sail through them.