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.
Some of the reasons which make India a magnet for investments are:
- Large and fast growing middle class and graduation of poor to middle class and hence growing domestic consumption.
- Indian Government’s constantly evolving investor friendly policies.
- Lower cost of production due to lower labor rates and friendly labor policies.
- Availability of skilled manpower.
- Abundant natural resources.
- English as one of the major business languages (India has the 2nd largest English speaking population in the world).
- Governments renewed emphasis on infrastructure improvement and up-gradation.
- India’s proximity to markets of South East Asia, Middle East and also Europe.
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 world’s 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.
The Indian stock market has experienced heady growth over the past decade with a number of foreign companies making entry into the Indian market. Deregulations, approval of foreign direct investment, and economic liberalization have prompted the growth of stock markets in India. After the general elections in 2014 which ushered in a pro-economy government the stock market has seen tremendous gains and the FII flow has increased to record levels. The Indian stock markets are estimated to rise to 27 thousand levels by the end of the year and present a huge opportunity for investors with an eye set towards India. Certain sectors in Indian economy are in need of investment sectors like
- Transportation (Roads and highways, ports and railways etc.)
- Manufacturing (Textiles)
- Oil and gas
- Mining
- Energy (Renewable energy like solar, wind, hydroelectricity, thermal etc.)
- Civil aviation etc.
This report on the outlook for lucrative investment areas reviews the potential future returns, technological advancements, regulations and market responses so as to provide a detailed but clear perspective on the potential implications for the growth prospects of these sectors for the next five years using past historical data and analysis.
