Investment in India

Attractive investment opportunities for NRIs in India

"India is clearly becoming a more and more important player on the world stage in G20 context, in terms of its role in the global economy. It is very useful for us to exchange ideas and build the basis for future collaboration," according to Mr Ben Bernanke, Chairman, US Federal Reserve.

India is the fifth best country in the world for dynamic growing businesses, according to the Grant Thornton Global Dynamism Index. The index gives a reflection of how suitable an environment it offers for dynamic businesses.

In addition, India's economic confidence registered an increase of 8 points, to reach 68 per cent in August 2012 as compared to the previous month, according to the 'Ipsos Economic Pulse of the World' survey. This makes India the fourth most economically confident country in the world.

India is also expected to be the second largest manufacturing country in the next five years, followed by Brazil as the third ranked country, as per Deloitte Touche Tohmatsu Ltd (Deloitte).

The Government of India has relaxed foreign direct investment (FDI) regime in sectors including multi-brand retail, single-brand retail, commodity exchanges, power exchanges, broadcasting, non-banking financial institutions (NBFCs) and asset reconstruction companies (ARCs) in 2012 to attract more and more direct investments.

Business Opportunities in India

Mr Mahmood Al Hashemi, Director General of Ajman Free Zone Authority (AFZA), UAE will tour India and address a series of seminars and press conferences in Mumbai, Delhi and Ahmedabad this month. This high profile visit to the Indian sub-continent will be to initiate and build a long and lucrative means of economic cooperation between the two countries.

This will provide huge opportunity to young entrepreneurs doing business in India.

Here's a list of 5 good opportunities non-resident Indians (NRIs) can look at:

• Software: India's software and services exports are likely to rise with export revenue growth projected at 13 to 15 per cent. With one of the largest pool of software engineers, NRIs can set higher targets in hardware and software development
• Tourism: Tourism is a booming industry in India. With the number of domestic and international tourists rising every year, this is one hot sector NRIs must focus on. India with its diverse culture and rich heritage has a lot to offer to foreign tourists. Beaches, hill stations, heritage sites, wildlife and rural life, India has everything tourists are looking for
• Automobile: India is now a hot spot for automobiles and auto-components. A cost-effective hub for auto components sourcing for global auto makers, the automotive sector is potential business in India for foreign investors
• Textiles: India is famous for its textiles. Each state has its unique style in terms of apparels. India can grow as a preferred location for manufacturing textiles taking into account the huge demand for garments. Places like Tirupur and Ludhiana are now export hubs for textiles. A better understanding of the markets and customers' needs can boost growth in this sector and attract direct investments
• Education and Training: There is a good demand for education and online tutorial services. With good facilities at competitive rates, India can attract more students from abroad. Unique teaching methods, educational portals and tools can be used effectively to make the sector useful and interesting

Exciting investment options for NRIs in India

India’s economy is amongst the largest in the world on the basis of Purchasing Power Parity. It is today one of the most attractive destinations for business and investment opportunities with the available large manpower base, diversified natural resources and strong macroeconomic fundamentals. In FY 2011-12, the country attracted foreign direct investment (FDI) of around US$ 46.8 billion in various sectors.

The economy of India also boasts a robust financial system and deep capital markets. India’s demographic are very attractive with approximately 65 per cent of the total population falling in the age group of 15 to 64 years. A comparatively stable Government, an open democratic set-up, and a strong and reliable judiciary system, add further advantage to the Indian Economy. The country’s strong fundamentals such as a growing middle class population, cost competitiveness and strong domestic consumption have made it a preferred destination for MNCs from across the world.

Government’s intervention on policy issues, especially, tax regulations and foreign direct investment (FDI) will play an important role in driving large transactions, especially, inbound deals. India’s growth story remains intact and NRIs/PIOs will continue investing in India.

Investment Options for NRIs in India

A stable, prosperous foundation is the primary requirement to grow one’s business in India. India offers such foundation. It provides rich business opportunities and markets to non-resident Indians (NRIs) and person of Indian origin (PIOs) for new products and services. It is one of the fastest, easiest and lucrative investment destinations in the world to set up business. India is the second-most profitable destination, according to UNCTAD's World Investment Prospects Survey 2010-2012.

NRIs/PIOs are investing in India, especially in the health care sector. The sector has opened up new business opportunities for them to invest in India because of the rise in disposable income, penetration of health insurance and change in lifestyle of present generation.

How can NRIs and PIOs invest in India?

The following investment opportunities are available to the NRIs and PIOs for investments in India:

• Non-Resident (External) Rupee (NRE) Accounts: NRE account may be in the form of savings, current, recurring or fixed deposit accounts. Such accounts can be opened only by the non-resident himself and not through the holder of the power of attorney. The interest rates on NRE Savings deposits shall be at the rate applicable to domestic savings deposits. Currently the interest rate is 3.5 per cent
• Non-Resident Ordinary (NRO) Rupee Account: NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts. Account should be denominated in Indian Rupees. Permissible credits to NRO account are transfers from rupee accounts of non-resident banks
• Foreign Currency Non Resident (Bank) Account – FCNR (B) Account: FCNR (B) accounts are only in the form of term deposits of 1 to 5 years. All debits / credits permissible in respect of NRE accounts, including credit of sale proceeds of FDI investments, are permissible in FCNR (B) accounts also. Account can be in any freely convertible currency
• The Government has created many policies and schemes to maximize investment options for NRIs/PIOs in the real estate sector of India
• RBI has allowed, both people residing outside India holding Indian passports and also PIO to invest in residential as well as commercial properties in India
• RBI has granted general permission to NRIs/PIOs, for undertaking direct investments in Indian companies, under the automatic route purchase of shares

There are many other exciting options for doing business in India, especially, for entrepreneurs dealing in outsourcing technology, internet ventures, software development, e-commerce, etc.