India is the world’s 7th largest country by land size and holds huge potential in certain areas which was largely untapped due to the bad economic conditions. Due to uncertain social and political climate, companies will be unwilling to make investments immediately but as time goes by India will get more and more foreign investment inflows. The key will be government support to foreign companies in the initial stages. Some Big investment proposals have already been floated.
On a recent visit of Indian Prime Minister in US have opened the doors for the investment. In a survey conducted during the event, India ranked 1st in terms of most preferred investment destination with 62% vote given by fortune 500 companies. Around 32% of companies have named India as 1st option and a total of 62% of companies named India among their 3 preferences.
India is slowly emerging as a big investment destination in the world. From 2006, India have blossomed because of FDI inflows, which resulted in double digit GDP growth in 2010 and above 9% in 2006 and 2007. A sudden rise of 155% FDI inflow is realized in FY 2006-07 because of reelecting the government. In FY 2014-15, we saw again a high rise of 23% in inflow because of the change in government which exhibited strongest majority since 1970’s. According to provisional figures given by RBI (central bank of India), FDI inflow reached a milestone of 44.29 billion US dollars in FY 2014-15.
India has some inherent advantages which make it a growth story for the years to come. India is a lower Middle Income Country and its per capita income is less than most of the emerging economies like China and Brazil which means that the spending potential of the population is moderate, just the product availability has to be there. Very few major brands are present in India, so there is little option for the Indians, this is true for most of the sectors like Communications, Retail, Automobiles etc. and 60% of the Indian Population is under the age of 25, so all the necessary ingredients required for the boom of consumerism in a country are all there and just the necessary fillip in form of investments is required.
India has crossed US$ 2 trillion mark making it 9th biggest economy in the world. India is in tough competition with Italy and Brazil and can easily take over these countries in near future.
India has emerged as one of the most attractive destination for investment and for doing business in the recent years. As one of the fastest growing economies in the world which has not only sustained the global downturn of 2008-09, India is slated to grow at consistently higher rates during next few decades
India has a large sized middle class (28.4 million households with a total of 153 million people.) which is further expanding, offering a large domestic market for foreign products and services. If India continues its recent growth trend, average household incomes will triple over the next two decades and it will become the worlds fifth largest consumer economy by 2025, according to a McKinsey report in 2010.
The consistent economic growth in India has been an important factor that has contributed towards the decline in poverty.