Opportunities And Limits Of Business In India

The Indian growth story seems to be on a roll and India has emerged as the fourth largest economy in the world on a purchasing power parity basis. The quality of business environment in India has improved manifolds in the recent years. The strong fundamentals underlying the Indian economy make it an obvious choice for investors all over the world.

India is the second most attractive destination for FDI:

The role of Foreign Direct Investment (FDI) in the upgradation of technology, skills and managerial capabilities is now well accepted. Additional investments, over and above the investments possible with the available domestic resources, help in providing much needed employment opportunities.

The 2012 A.T. Kearney Foreign Direct Investment Confidence Index has ranked India second most attractive destination for FDI, an improvement from its third rank in the year 2010. The top 10 of sectors attracting highest FDI inflows are:

- Services Sector (19%),

- Construction development: townships, housing, built-up infrastructure (12 %),

- Telecommunications (7 %),

- Computer Software & Hardware (6 %),

- Drugs & Pharmaceuticals (5%),

- Chemicals (5%),

- Power (4%),

- Automobile Industry (4%),

- Metallurgical Industries (4%),

- Hotel & Tourism (3%).

The top 10 of investing countries are:

- Mauritius (38%),

- Singapore (10%),

- U.K (9%),

- Japan (7%),

- U.S.A (6%),

- Netherlands (4 %),

- Cyprus (4%),

- Germany (3%),

- France (2%),

- U.A.E (1%).

These investments are encouraged by the facts that India has a large pool of skilled and competitive manpower, huge research and development base, Government support and conducive policies, growth in the Indian domestic market owing to higher disposable incomes, abundant natural resources required to set up industries, etc. The reform process initiated during the late eighties and early nineties have begun to show their impact and India is taking huge strides in the course of growth and development.

Imports in India represent USD284 billion:

Import of all commodities is free in India, except for items regulated by any law or policy in force. Some items in the prohibited list, such as the fat or oils of any animal as well as ivory, cannot be imported into India. The country’s key imports include petroleum, electronic goods, machinery, gold, pearls and semi-precious stones.

Principal countries from which India imports are China who has the largest share in India’s imports and other countries include the UAE, Saudi Arabia, the US and Iran. Due to rapid industrialization, imports to the country are

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