Investment in India

Investment options in India, one of the most attractive economies in the world

The Indian economy continues to grow at a good pace and holds a strong position. Indiaís economy is amongst the largest in the world on the basis of purchasing power parity (PPP). It is today one of the most attractive destinations for business investment opportunities with the available large manpower base, diversified natural resources and strong macroeconomic fundamentals. During April-January 2012-13, India received foreign direct investments (FDI) worth US$ 30.82 billion while FDI equity inflows during January 2013 stood at US$ 2.16 billion, according to latest data released by the Department of Industrial Policy and Promotion (DIPP).

India is the third-most attractive destination for FDI in the world. Indian markets have significant potential and a favorable regulatory regime for foreign investors, according to a survey titled World Investment Prospects Survey 2012ñ2014 by UNCTAD.

"We are keen to see FDI investment to surge in India and to that end, a favourable business climate will be helpful in going forward. We are encouraged to see there is a continued path towards fiscal consolidation," according to Ms Christine Lagarde, Chief, International Monetary Fund (IMF).

Changes made by the Mr P Chidambaram, Union Minister for Finance, Government of India, in the Union Budget 2013-14 can greatly benefit high net worth individuals looking to invest in India, where returns on investments are higher than in any other market.

Key sectors in India where foreign investors can invest

India has become a trillion dollar economy with a self-sufficient agricultural sector, a varied industrial base and a well-established financial and services sector. There are numerous sectors that offer lucrative business opportunities in India. Some of the key investment sectors are:

• Aerospace & Defence
• Automotive
• Banking
• Biotechnology
• Information Technology
• Insurance
• Power
• Real Estate
• Retail
• Telecommunications

Government Initiatives in supporting business investments opportunities in India

In order to enable investors to have the complete benefit of available business opportunities in India, the Government of India has taken following initiatives:

• The Government of India has relaxed in expense ratios for mutual funds and the prospects of higher FDI limits in insurance sectors could unlock huge opportunities in these investment sectors.
• The Government has allowed Qualified Foreign Investors (QFIs) ó individuals, groups or associations ó to invest directly in Indian equities and bond markets.
• To encourage the micro, small and medium enterprises (MSMEs), the Government of Tamil Nadu (TN) has announced a special component package, which includes creation of an additional land bank for setting up new industrial estates in the state, increase in subsidy for machinery purchases and creation of a single window clearance committee to facilitate speedy approvals for industrial estates, said Ms J Jayalalithaa, Chief Minister of Tamil Nadu (TN).

Investment facilitation in India

The Ministry of Overseas Indian Affairs in partnership with Confederation of Indian Industry (CII) has set up an Overseas Indian Facilitation Centre (OIFC) as a not-for-profit-trust, to facilitate non-resident Indians (NRIs), overseas corporate bodies of overseas Indians and non-resident Indians who want to invest in India.

In order to ease the process for foreign investors to invest in India, OIFC has developed an online toolkit - Investment Guide to India. The toolkit serves as a simple, practical and stage-wise investment guide for the non-resident Indians wanting to invest in India.

How investment guide helps NRI to invest in India?

A growing India offers opportunity across sectors — notably infrastructure, pharma, automobiles, education and many more — in an investor-friendly environment. An investment guide answers all your questions about investing in India. The guide provides information about registering a company, entry strategy, state policies and doing business in India.

Top 6 safe investments in India

1. Bank Fixed Deposits: Bank failures are rare in India, so bank fixed deposits are a very safe way to invest your money. You know the rates up front, so there is no uncertainty there. Taxes can eat into your returns though, especially if you are in the high tax bracket, but even then a fixed deposit (FD) that compounds quarterly and is done for a long maturity will yield well.
2. Tax Saver Bank Fixed Deposits: Like the bank fixed deposit, this is also a very safe and certain investment. The drawback is that money is locked in for at least 5 years, and the positive is that you get some tax benefit to juice up your return.
3. Public Provident Fund: This is also a very safe investment, and the returns are spectacular, especially for someone in the 30 per cent tax bracket. If you don’t mind the 15 year wait period, no other fixed income investment can match the public provident fund (PPF) return for the safety it offers.
4. National Savings Certificates (NSC) IX Issue: This is another safe investment with decent returns.
5. Senior Citizens Savings Scheme (SCSS): A lot of people realise that over the years, the SCSS is quite useful along with the monthly income scheme of the post office for their parents, and relatives and this is a good business opportunities as well.
6. Tax Free Bonds: These bonds aren’t as safe as a bank deposit or a post office deposit but they can still be categorised as fairly secure instruments. If you buy these bonds from the stock market right now, they are trading at higher than their face value, so your effective yield will be less but then there is always a chance to make capital gains if interest rates come down.

Investment Tool Guide

• Welcome to Invest India: Invest India is the country’s official agency dedicated to investment promotion and facilitation. Its mandate is to become the first reference point for the global investment community. It provides granulated, sector-specific and state-specific information to a foreign investor, assists in expediting regulatory approvals, and offers hand-holding services. Its mandate also includes assisting Indian investors in makings informed choices about business opportunities overseas.
• Investment Toolkit: In order to ease the process of investing into India, Overseas Indian Facilitation Centre (OIFC) has developed an online toolkit–Investment Guide to India. The toolkit serves as a simple, practical and stage-wise investment guide for the non-resident Indians wanting to invest in India.

Investment Guide to India provides an end-to-end investment solution, customised to the needs of the potential diaspora investors.

Wealth Management Investment Guide for NRIs

What would you prefer: Rs 1, 00,000 right now or Rs 1, 00,000 five years from now?

It will be better if we should take Rs 1, 00,000 today because we know that there is a certain time value of money. The Rs 1, 00,000 received now will provide us with an opportunity to put it to work instantly and earn a certain return on it.

A single rupee today is worth more than a single rupee a few years down the line. Because of this, people who have surplus funds in the form of savings want to invest so that the value of the funds over the years does not go down.

It is also very important to determine your financial goals. You need to decide which type of investment strategies works for you. Your strategy will determine the extent of your success in the investment world whether you invest in India or overseas markets.

The strategies can differ greatly from a rapid growth strategy where an investor focuses on capital appreciation to a safety strategy where the focus is on wealth protection. The most important part of investment strategies is that it aligns with the individual's goals and is closely followed by the investor.

Investment options in India

There are various forms of investments options at the disposal of individuals in India. These include real assets like a house, a car, a television, or financial assets like stocks in companies, bonds, units of funds, etc.

Traditionally, term deposits in banks, post office savings schemes, bonds and common stocks are the most accessible forms of investments available to the investors. Term deposits, post office savings schemes and bonds give a fixed return over a period of time.

Several national priority level and state-specific projects are being implemented across the country by the Government of India. These offer huge potential for investors willing to invest in India. The Government is in fact, promoting Public Private Partnerships (PPPs) in many projects opening up new vistas in sectors such as infrastructure, education, healthcare etc.

Wealth management services in India

There are individual investment avenues in India that help you enhance your individual wealth. These are offered by eminent banks in India, which have rich experience in servicing overseas Indians. Not only will you get to choose from a wide bouquet of investment products, but these can also be customised as per your individual needs.

Investment Toolkit

In an effort to ease the process of investing into the country, Overseas Indian Facilitation Centre (OIFC) has developed an online ‘NRI Investment Guide'.

The toolkit provides an entire range of investment guidelines, policies and procedures, suggests the range of compliance requirements and clearances, as desired, in synergy with the investor’s investment preferences. In other words, it is a simple, practical, and realistic online investment guide customised to the needs of overseas Indian investors.

Investment Facilitation Platform of OIFC helps NRI through the complete process of investing, right from choosing the correct investment opportunities and applying right investment strategies to actually making the investment.