Investment in India

Scenario of real estate sector in India

The Indian real estate sector has witnessed significant growth in the past few years and is expected to grow at the rate of 30 per cent in the coming years. The sector has emerged as one of the most appealing investment sectors for domestic as well as foreign investors.

The major factors responsible for growth in the sector are increasing purchasing power, favourable demographics, existence of customer friendly banks & housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract real estate investments.

Growth prospects

The Indian real estate market size is expected to touch US$ 180 billion by 2020. In fact, the demand is expected to grow at a compound annual growth rate (CAGR) of 19 per cent between 2010 and 2014, with tier I metropolitan cities projected to account for about 40 per cent of this.

Investment opportunities

At present, investment trends in India are showing a huge number of NRIs investing in Indian real estate sector.

India needs to invest US$ 1.2 trillion over the next 20 years to modernise urban infrastructure and keep pace with the growing urbanisation, as per a report released by McKinsey Global Institute (MGI)-India's urban awakening.

Growing infrastructure requirements from sectors such as education, healthcare and tourism are providing numerous opportunities in the sector. Further, India is going to produce an estimated two million new graduates from various Indian universities during the year, creating demand for 100 million square feet of office and industrial space. In addition, presence of a large number of Fortune 500 and other reputed companies will attract more companies to initiate their operational base in India, thus creating more demand for corporate space.

FDI in Indian real estate

Construction development sector (including townships, housing, built-up infrastructure & construction-development projects) has attracted a cumulative foreign direct investment (FDI) worth US$ 22,007.67 million from April 2000 to February 2013, according to the Department of Industrial Policy and Promotion (DIPP).

In addition, the sector is set for robust inflows of US$ 4-5 billion from overseas investors in the next couple of years, with Bangalore, Delhi and Mumbai emerging as the favourites, as per Jones Lang LaSalle, a global real estate consultancy giant.

Government initiatives in the sector

The Government of India (GOI) has allowed FDI up to 100 per cent under the automatic route in townships, housing, built-up infrastructure and construction development projects to increase real estate investment, generate economic activity, create new employment opportunities and add to the available housing stock and built-up infrastructure.

The Reserve Bank of India (RBI) has granted permission to foreign citizens of Indian origin to purchase property in India for residential or commercial purposes. Further, the government is also committed to introducing FDI in multi brand retail, introduce changes in the existing SEZ policy to resurrect developer interest and expand the role of the private sector in infrastructure development.

Tax Advantages

People can avail huge tax benefits on investing in real estate:

• Tax exemption is available on re-investment of sale proceeds of property in eligible possibilities
• Tax benefit is available on interest on housing loan raised in India

Investment opportunities for foreign investors in India

The Indian economy has continuously recorded high growth rates and become an attractive destination for investment. According to recent trends, India is only second to China in the league of favorite investment destinations. As the Indian economy is developing very fast, it has opened new avenues for people to start businesses.

Doing business in India is a profitable option as the majority of the industries and sectors are almost untapped and hence the fear of facing stiff competition is less. "Our economic and commercial relations are expanding. But there is still a lot of untapped potential that needs to be exploited, especially in sectors like agro-processing, manufacturing, pharmaceutical, medical equipment, seafood, automobile parts, tourism and hospitality, IT and IT-enabled services," according to Anand Sharma, Minister of Commerce and Industry.

Investment sectors in India for NRIs

The sectors in which the non-resident Indian (NRI) can invest through the automatic route include agriculture, mining, alcohol brewing, power, industrial explosives, hazardous chemicals, drugs and pharmaceuticals, transport, insurance, industrial parks, non-banking financial institutions, etc. In some cases, the approval of the Foreign Investment Promotion Board (FIPB) may be required. These include sectors like tea, infrastructural companies except telecom, publication of newspaper and periodicals, courier service and single brand product retailing.

The various sectors where NRI investments in India are prohibited include retail, atomic energy, lottery and gambling establishments, tobacco products, etc.

Investment environment in India

The Government of India is trying to accommodate and utilise the conducive investment climate of the country by relaxing and even introducing new policies. The change in government policy, availability of cheap resources, tax holidays, liberalisation of external commercial borrowing norms, etc. are the important reasons for increasing NRI investments in India.

NRIs are permitted to open bank accounts in India with funds remitted from abroad, foreign exchange brought in from abroad or with funds legitimately due to them in India, with authorised dealer.

Ways of investing in India

The foreign investors can invest in India in two ways:

• Incorporation of an Indian company: The foreign investor can set up a separate legal entity in India under the provisions of the Companies Act, 1956. The foreign investors can invest in such Indian company up to 100 per cent of capital based on sectoral guidelines specified by the Government of India.
• Unincorporated entity: A foreign company can operate in India, by establishing a Branch Office of the other place of business (foreign entity), subject to conditions and activities permitted under the Foreign Exchange Management Regulations.

Investment Facilitation

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

Further, in order to ease the process of investment 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.

Booming infrastructure industry of India

Infrastructure development in India has contributed majorly in the country's economic transformation and growth during the last decade. Roads, ports, railways and power are key segments of the infrastructure sector. Some of the key facts related to the same are:

• Indian Shipping segment, with 187 minor ports and 13 major ports, is spread across nine maritime states
• The Indian Railways network is spread over some 64, 000 km, with 12, 000 passenger and 7, 000 freight trains plying each day from 7, 083 stations carrying around 23 million travellers and 2.65 million tonnes (MT) of goods daily
• Indian road network is the second largest in the world with a total length of 4.1 million kilometres (km)

The total investment for the road sector is projected at Rs 9.20 lakh crore (US$ 167.55 billion) during the Twelfth Plan (2012-17), of which the Central and States would contribute Rs 3.58 lakh crore (US$ 65.19 billion) and Rs 2.66 lakh crore (US$ 48.44 billion), respectively, representing about 68 per cent of the total investments in infrastructure sector. Meanwhile, the private sector is anticipated to account for 32 per cent or Rs 2.94 lakh crore (US$ 55.6 billion) of the total investment.

Foreign investors are looking for high return on investments and are going to target Indian infrastructure companies in the coming years.

Investments options for NRIs in Indian infrastructure industry

The Cabinet has given its nod to private investment in state-run Indian Railways for building new rail lines and plants and enhance capacity. The move would allow foreign investors to connect railways with the ports, mines and industrial plants by providing last-mile connectivity and thereby reduce transportation costs

The Indian Government has also envisaged The Indian Railways Vision 2020 which aims to tackle infrastructure obstacles and deliver best services while building capacity, opening up huge investment opportunities for NRIs.

Further, the Government has recently approved nine road projects worth around Rs 11, 600 crore (US$ 2.11 billion), to be executed by State Governments under public private partnership (PPP) model. These projects, totalling up to 1, 226 km, are being bid in Andhra Pradesh, Uttar Pradesh and Bihar.

The finance ministry would provide 20 per cent of the financial requirement while another 20 per cent would come from the highways ministry in order to make these projects financially viable in the form of viability gap funding (VGF). The Government of India (GoI) has earmarked Rs 2, 295 crore (US$ 417.88 million) under VGF, wherein Rs 500 crore (US$ 91.06 million) would be released in 2012-13.

Future of infrastructure sector of India

India is betting high on private investments in infrastructure sector as the Government hopes that the private sector, through PPPs, will invest US$ 350-400 billion in infrastructure sectors (like roads, ports, railways and airports) between 2012 and 2017. This is about half the total investment in infrastructure according to the 12th Five Year Plan.

Moreover, seeking about US$ 1 trillion of investments in highways, harbours and power plants from 2012-2017 for infrastructure development in India, the Prime Minister, Manmohan Singh would lead a panel focussed at speeding up approvals of infrastructure projects. The Cabinet Committee on Investment would aim at easing bottlenecks that subdue growth and development of the country.

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.

Growing prospects in Indian electronics industry

The growing sales figure for the consumer electronic goods, a flourishing telecom/networking market and noteworthy growth in the use of portable/wireless products are some of the significant trends observed in India at present and they are providing stimulus to the growth of the electronics design industry to a greater scale.

India has a well-developed electronics design industry, with 120 design units and is ranked the second among the US, the UK, Germany, Sweden, China, Taiwan and Israel in terms of design revenues.

Electronics is essential for setting up technology infrastructure, and semiconductors are the main component of electronics products. Electronics sales in India, which totalled US$ 40.7 billion in 2009, will touch US$ 400 billion by 2020. At present, local manufacturing accounts for about 40 per cent of consumption and it could increase to 80 per cent by 2020.

The key drivers for the electronics market in India include telecom infrastructure equipment, wireless handsets, notebooks and other IT and office automation products, set-top boxes and smart cards. Growth sectors including health care equipment, automotive, consumer goods and industrial goods—all of which increasingly use electronics—are also expected to boost electronics consumption in India and open up more investments opportunities for non-resident Indians (NRI).

Investment options in electronics industry of India

In India, after Bangalore, Noida has become a hub for electronics design industry with many major players setting up their offices and research and development (R&D) centres in the city. Global MNCs such as Freescale, Mentor Graphics and Interra Systems are some of the major companies in Noida.

The Government of India is continuously making efforts to boost Indian electronics industry and is attracting foreign and local players to invest in electronics sector of the country. For the purpose, the Government has set up an Empowered Committee that would invite a preliminary Expression of Interest (EoI) from potential technology providers and investors.

100 per cent FDI in India under the automatic route is allowed in semiconductor fabrication to promote electronics manufacturing in India.

The Union Cabinet has approved a proposal to offer financial assistance for the development of electronics manufacturing clusters (EMCs), to aid the growth of the Electronic System Design and Manufacturing (ESDM) sector in India. The scheme is expected to help flow of investment for development of the ESDM sector.

The Government is also formulating a special incentive package to encourage local manufacturing of electronic goods. The package includes reimbursement of indirect taxes, and a subsidy of 20 per cent on capital expenditure made by high-tech manufacturers in special economic zone (SEZ) units.

Future of Indian electronics sector

The growing tablet market; increasing notebook penetration coupled with widespread demand for flash memory and desktops from e-Governance programmes will drive the growth of the Indian semiconductor market.

"Semiconductors and electronics are at the heart of technology driven products that will drive the US$ 400 billion Indian electronics market by 2020. ISA is committed to working with all the stake-holders from industry, academia and government to enable the eco-system that will convert this opportunity into reality," as per Dr Pradip K Dutta, Chairman ISA and Corporate Vice-President & Managing Director, Synopsys India.

FDI in India in the electronics sector is very crucial for the development of the IT and the ITES sector in India.

The robust growth in the Indian semiconductor design industry has opened up a lot of opportunities to invest in electronics sector of India.

Booming Education Industry of India providing huge business opportunities

In India, education is the key to the task of nation-building. It is also a well-accepted fact that providing the right knowledge and skills to the youth can ensure the overall national progress and economic growth. The Indian education system recognises the role of education in instilling the values of secularism, egalitarianism, respect for democratic traditions and civil liberties and quest for justice.

The ongoing demand to strengthen the Indian education sector has opened up many avenues for people of India as well as non-residents of India (NRI) to invest in education sector.

Market Size

The education sector in India is evolving, led by the emergence of new niche sectors like vocational training, finishing schools, child-skill enhancement and e-learning.

According to a report 'Education in India: Securing the demographic dividend,' published by Grant Thorton, the primary and secondary education, or K-12 sector is expected to reach US$ 50 billion in 2015 from US$ 24.5 billion in 2008, growing at an estimated compound annual growth rate (CAGR) of 14 per cent.

Government Initiatives to boost Investments

The education sector in India is also considered as one of the major areas for investments as the entire education system is going through a process of overhaul, according to a report ‘Emerging Opportunities for Private and Foreign Participants in Higher Education’ by PricewaterhouseCoopers (PwC).

Ever since, the Government of India has allowed foreign direct Investment (FDI) up to 100 per cent through the automatic route, many people find it convenient and profitable to invest in education sector.

Some of the initiatives taken by the Government for the infrastructural development of the sector and to increase the business opportunity in education are:

• For the year 2012-13, Rs 25,555 crore (US$ 4.63 billion) have been allotted for RTE-SSA (Right to Education - Sarva Shiksha Abhiyan) which represents an increase of 21.7 per cent over the previous year allotment in 2011-12
• 6,000 schools have been proposed to be set up at block level as model schools in the Twelfth Five Year Plan (2012-17)
• Rs 3,124 crore (US$ 566.69 million) have been provided for the RMSA (Rashtriya Madhyamik Shiksha Abhiyan), which is an increase of 29 per cent over 2011-12
• India and Republic of Korea have signed a memorandum of understanding (MoU) for cooperation in the field of education
• Prime Minister's fellowship scheme for doctoral research has been launched in New Delhi by Mr S Jaipal Reddy, Union Minister for Science and Technology, according to Confederation of Indian Industry (CII)
• The Ministry of Human Resource Development (MHRD) plans to set up ten community colleges in collaboration with the Government of Canada in 2012. The Government of India has decided to set up hundred community colleges this year
• The Government of India plans to set up an Indian Institute of Agricultural Biotechnology at Ranchi with an investment of Rs 287.50 crore (US$ 52.15 million). The Institute will be a deemed university and will have different schools to import knowledge in genomics, bioinformatics, genetic engineering, nano biotechnology, diagnostics and prophylactics and basic and social sciences and commercialization

Booming Indian Economy offering huge investment options for NRIs

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 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.

Being the world's largest democracy with over 1.2 billion people means a plethora of business opportunities for its people. The country also offers innumerable investment opportunities for NRIs. Combined with young skilled manpower along with a well established judicial and stable government conducive to business, are all positive points towards India's business potential.

Additionally, strong growth across diverse parameters like being the 2nd most attractive FDI destination, steady Infrastructure & GDP growth and being one of the largest economies of the world reinforce the strength of India's economy. All this translates to the availability of new investment opportunities for NRIs in India spanning all sectors of the Indian economy.

Key Sectors

The various key investment sectors in India offering lucrative business opportunities are Aerospace & Defence, Automotive, Banking, Capital markets, Life Sciences, Information Technology, Insurance, Media & Entertainment, Mining & Metals, Oil and Gas, Ports, Power and Utilities, Real Estate, Retail and consumer products, Roads and highways, and Telecommunications.

Growth Potential in key sectors

Indian tax climate is considered to be reasonably favourable and India has continued to be an attractive investment destination, according to a survey conducted by Deloitte Touche Tohmatsu Ltd (Deloitte).The investment sectors in India are witnessing new heights in terms of contribution both from the domestic front as well as from the foreign land.

• The pharmaceutical market of India is expected to grow at a compound annual growth rate (CAGR) of 14-17 per cent over 2012-16 and is now ranked among the top five pharmaceutical emerging markets globally
• India's IT and business process outsourcing (BPO) sector exports are expected to increase by 12-14 per cent in FY14 to touch US$ 84 billion - US$ 87 billion, as per National Association of Software and Services Companies (Nasscom)
• Indian manufacturing and natural resources industry plans to spend Rs 40,800 crore (US$ 7.53 billion) on IT products and services in 2013, a growth of 9.1 per cent over 2012, according to Gartner. The telecommunications category remains the biggest spending category and it is forecast to reach Rs 13,200 crore (US$ 2.43 billion) in 2013
• The electronic system design and manufacturing (ESDM) sector of India is projected to reach US$ 94.2 billion by 2015 from US$ 64.6 billion in 2011, according to a report by the India Semiconductor Association (ISA) and Frost & Sullivan
• The luxury car market of India is set for growth over the medium and long term, according to Mr Philipp Von Sahr, President, BMW Group India. The market is about 30,000 cars a year and is rising steadily, Mr Sahr added

Indian retail market opened more doors for NRIs

The recent wave of reforms by the Government to incentivise foreign direct investment (FDI) in various sectors is bringing a new zeal to the investment options in India. One of the most debated reforms is the policy for allowing 51 per cent FDI in multi brand retail.

Retail Market in India

The Indian retail industry has experienced growth of 10.6 per cent between 2010 and 2012 and is expected to increase to US$ 750-850 billion by 2015. Food and Grocery is the largest category within the retail sector with 60 per cent share followed by Apparel and Mobile segment.

Within the organised retail sector, Apparel is the largest segment. “Food and Grocery” and “Mobile and telecom” are the other major contributors to this segment.

Evolution of the FDI policy in multi brand retail

The Government of India had been considering opening up the multi brand retail sector to FDI for some time. They had released a discussion paper in 2010 on the topic and had extensively gathered public, academic and industry views on the issue. In November 2011, the Government came out with its proposal for the new FDI policy. However, unable to achieve political consensus on the issue, they had to shelve their plans for the enactment of the policy. Finally, the Government decided to pass the new FDI policy on multi brand retail in September 2012 to increase investment options in India.

The FEMA notification issued by the Reserve Bank of India permitting FDI in the retail sector was laid before the Houses of Parliament and the same has been cleared without any modification.

The changes in some of the policy conditions indicates government intention to attract more NRIs to invest in retail sector of India and provide a window to foreign retailers to cultivate/ grow the SME segment.

Policy Implications

The FDI policy conditions will have a different impact on the various sub-segments of the retail industry in India. A policy condition might have a low impact in one segment but could be a major stumbling block for another segment. Implications of each FDI policy condition in Mass Grocery, Apparel and specialty stores such as Beauty & Wellness and Consumer Electronics are:

• Minimum FDI of US$ 100 million: Minimum FDI of USD 100 million and a constraint of maximum 51 per cent stake of the foreign entity imply that the minimum investment required by both, the foreign and the Indian partner together, is more than Rs 1000 crore
• 50 per cent of FDI in backend infrastructure in three years: Minimum investment of Rs 220 crore-Rs 250 crore is to be invested in backend infrastructure in the first three years to invest in retail sector of India. However, different retail segments have dynamic requirements of backend infrastructure
• 30 per cent of sourcing from “small” industries: This policy constraint implies that retailers should have at least 30 per cent sales from private label brands or unbranded products sourced from small industries

Policy conditions of 50 per cent investment in backend and 30 per cent sourcing from small industries are the two most difficult conditions to be met for FDI in multi brand specialty retail such as Consumer Electronics, Beauty & Wellness etc.

Investments options for NRIs in Indian infrastructure sector

Infrastructure development in India has contributed majorly in the country's economic transformation and growth during the last decade. Roads, ports, railways and power are key segments of the infrastructure sector. Some of the key facts related to the same are -

• Indian Shipping segment, with 187 minor ports and 13 major ports, is spread across nine maritime states
• The Indian Railways network is spread over some 64, 000 km, with 12, 000 passenger and 7, 000 freight trains plying each day from 7, 083 stations carrying around 23 million travellers and 2.65 million tonnes (MT) of goods daily
• Indian road network is the second largest in the world with a total length of 4.1 million kilometres (km)

Investment Opportunities for NRIs

Overseas investors looking for high return on investments are going to target Indian infrastructure companies in the coming years, says a report by research agency Preqin. As per the study, India is attracting the highest number of unlisted, closed-end funds that focus on a single country, making it the most preferred choice among the business investors. India is expected to require around US$ 1 trillion worth of infrastructure investment over the next five years

Non-resident Indians (NRIs) investing in India can choose from sub-sectors such as power, telecom, roads and ports. The Preqin report says 74 per cent of India-focused funds will invest in greenfield projects, 84 per cent in brownfield assets, and 42 per cent will buy out the stakes of other PE funds.

Investments Policy Updates

• FDI up to 100 per cent under the automatic route is permitted in exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products, actual trading and marketing of petroleum products, petroleum product pipelines, natural gas/LNG pipelines, market study and formulation and Petroleum refining in the private sector. This will be subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of national oil companies
• FDI up to 49 per cent is permitted under the Government route in petroleum refining by the Public Sector Undertakings (PSU)
• FDI up to 100 per cent under the automatic route is allowed both in setting up new and in established industrial parks from overseas investors

Recent Investments in Indian Infrastructure Industry

• IVRCL Ltd has entered into an MoU with the Haryana Government for the development of Rai Malikapur-Kharak road corridor which would cover a stretch of 151 km of Rai Malikapur close to the Rajasthan border up to Kharak corridor and enhance the north-south connectivity. The Rs 1, 605 crore (US$ 292.23 million) project will take about 30 months to execute
• Indian Railways has recently launched an application namely RailRadar which envisages an interactive map to allow users to track train movements on real-time basis. Such an application has been launched for the first time in India, wherein any of the public transport system can be tracked on the internet and mobile

Future of Indian Infrastructure

India is betting high on business investors in infrastructure as the Government hopes that the private sector, through public-private partnerships (PPP), will invest US$ 350-400 billion in infrastructure sectors (like roads, ports, railways and airports) between 2012 and 2017.

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.