Economy :

INDIA

Population :1,166,079,217 (July 2009 est.)
(country comparison to the world: 2 )

India - the fastest growing free-market democracy

India’s competitiveness from a natural and human resources standpoint is making it the destination of choice for investors.

India is a fast-growing economy with a dynamic and robust financial system. Being a democracy ensures a stable policy environment and its independent institutions guarantee the rule of law.

This highly diversified economy has shown rapid growth and remarkable resilience since 1991, when economic reforms were initiated with the progressive opening of the economy to international trade and investment. Events such as the asian currency crisis, the dotcom bust and rising oil prices have had no significant impact on India's growth; with the economy recording an average annual GDP growth of over 6.5% in the past decade. Going forward, the country is targeting an average GDP growth rate of over 8% per annum.

Large and growing domestic market

India is experiencing a boom in consumer spending

Over 300 million Indians (63 million households) are expected to have a household income of over US$6,000 by 2015 (over US$30,000 in PPP* terms). India is experiencing a rapid growth in consumer spending. The economic reforms since the early nineties have unleashed a new entrepreneurial spirit creating a vibrant economy supported by rising per capita income .

Fast-growing disposable incomes, increased availability and use of consumer finance and credit cards complement the keenness of the average Indian to adapt to and assimilate global trends. This has led to the creation of a rapidly growing consumer base and one of the world’s largest markets for manufactured goods and services.

Growth in key sectors like infrastructure, services and manufacturing continues at about 10-12% p.a.

The market for basic goods such as groceries and textiles is already large, driven by the demands of an enormous population. Markets for other products are equally large and growing rapidly.

• Over 225 million telephone subscribers, growing at over ~75 million p.a.
• Over 8 million TV sets and 4 million refrigerators are sold annually and expected to growth at 20% p.a.
• Total production of vehicles has crossed 11 million in 2006-07, up from 8.6 million in 2004-05. In 1998-99, this was only 4.2 million.

India has been ranked 1st by AT Kearney in a Global Retail Development Index of 30 developing countries and is seen as a potential gold mine.

Stable economic reform regime

After several years of being a largely closed economy, India initiated the process of opening up its economy in 1991 when it introduced far-reaching economic reforms of deregulation and liberalisation. These reforms have unlocked India’s enormous growth potential and unleashed powerful entrepreneurial forces. Since 1991, successive governments across political parties have successfully carried forward the country’s economic reform agenda.

During this reform period, India has witnessed increased participation in world trade, consistent, high economic growth and an increasingly favourable environment for domestic and foreign investors.

India is a founder member of the GATT (General Agreement on Tariffs and Trade) and is a signatory to the WTO (World Trade Organisation). India continues to play a significant role in the current WTO negotiations.

Going forward, infrastructure development is a major focus area and the government is actively encouraging private investment to bridge the gap. Projects underway include a ~US$12 billion National Highway Development Project, the “Sagar Mala” project for the expansion and modernisation of ports, inland navigation and maritime transport, the privatisation of Mumbai and Delhi airports and development of greenfield airports at Hyderabad and Bengaluru by the private sector.

The Government passed the Special Economic Zones (SEZs) Bill in 2005. SEZs are treated as deemed foreign territory with no import or export tariffs and extended periods for waiver of income taxes. Over 130 SEZs have already been formally approved by the government.

Legislation on Intellectual Property Rights (IPRs) has been adopted by the country’s Parliament. All IPR laws are TRIPS (Trade Related Aspects of Intellectual Property Rights) compliant with a fully functional Intellectual Property Appellate Tribunal.

Versatile, skilled human capital

An unparalleled resource of an educated, hard-working, skilled and ambitious workforce is the hallmark of India’s human capital.

That this workforce is also one of the world’s youngest adds to India’s attractiveness as an investment destination. Of the BRIC* countries, India is projected to stay the youngest with its working-age population estimated to rise to 70% of the total demographic by 2030 - the largest in the world. India will see 70 million new entrants to its workforce over the next 5 years.

English is the language of business in India and the large English-speaking workforce is a benefit to investors and employers. In fact, the number of Indians who know English is more than the population of the USA. India’s diverse cultural heritage puts its citizens at ease with people from other cultures and vice versa.

With over 380 universities, 11,200 colleges and 1,500 research institutions, India has the second largest pool of scientists and engineers in the world. Over 2.5 million graduates are added to the workforce every year, including 300,000 engineers and 150,000 IT professionals.

Source : CIA Factbook - India Investment Commission