WHY INDIA


MAJOR REASONS TO DO BUSINESS IN INDIA
 
India is the second largest country in the world by population, the world’s largest democracy. Recording an annual average growth rate of 7.5% from 2014 to 2015, India’s economy is now growing faster than China’s. The country’s economy is set to exceed the size of the French economy in the next few years and is forecast to be the 7th largest economy in the world by 2019.
 
India’s new government is committed to pursue economic growth and steps by the NDA government such as the “Make in India”, “Digital India” “Skill India” and “Smart Cities” and various business friendly reforms have significantly created a positive business environment in the country. India’s growth is largely driven by domestic demand, fuelled by a rapidly growing middle class. It is an important market for French goods and services, including consumer products.
 
THERE ARE THREE DRIVERS FOR THIS GROWTH:
 
EMERGING CONSUMERS
 
With over 1.2 billion people, of whom 572 million are under the age of 24, India is currently the country with the biggest youth population in the world. Rising incomes and a greater exposure to Western lifestyles will also create inflexion points for various products and services, as previously unattainable purchases will become necessities. Both of these developments are likely to unleash a substantial shift in consumer spending and consumption patterns over the next two decades.
 
Combined with rising income levels and a growing middle-class, India matters and presents significant opportunities for French businesses. 
 
EMERGING REGIONS
 
The current government’s reforms include greater co-operation between state and central governments. Co-operative federalism with the centre will be key in achieving India’s sustainable development and competition between states is likely to bring about greater efficiencies. Patterns of competitive federalism are already evident with many States doing their best to cut down on red tape and simplify compliance procedures to appear more business-friendly and attract investments.
 
In 2013-14, 24 of India’s 29 states grew at rates in excess of 5.5%, with the wealthiest one, Maharashtra (capital Mumbai), recording a growth rate of 7.3%. Some of India’s states such as Bihar, Madhya Pradesh, Meghalaya and Tripura recorded growth rates over 9%. The next round of economic growth will thus take place in India’s emerging states and cities, with rapid development in rural areas. 
 
EMERGING SECTORS
 
There are opportunities in nearly every sector. However major shifts are underway in India driven by a series of strategic development initiatives including Make in India (MII), Digital India and Skill India. India’s development initiatives and rapid economic growth means growing opportunities in emerging sectors such as digital innovation, energy and sport to name a few. 
 
Why You Should Choose to Invest in India
 
Strong PointsIndia has a three-tiered democratic system that ensures a stable political environment. It has a well-developed administration and an independent judicial system, along with a vast geography, making the country a repository of resources. There is an unparallelled pool of educated, hard-working and skilled workers, which includes engineers, management personnel, accountants and lawyers. India also hosts an ever-growing consumer base, making it one of the world's largest markets for manufactured goods and services. Weak PointsIndia faces problems in relation to corruption (particularly at the federal level) and political pressure, depending on the party in power both regionally and nationally. FDI is restricted in certain sectors, and there is a weakness of infrastructure along with inadequate security & safety in certain areas. Government Measures to Motivate or Restrict FDIThe government has set up tax and non-tax incentives to establish new industrial entities in specific sectors, which include energy, ports, highways, electronics and software. The government has also created special areas dedicated to export, called export-processing zones (EPZs) or special economic zones (SEZs), to encourage foreign investment.
 
The central government development banks and state industrial development banks offer medium to long-term loans and sometimes invest their own capital in new projects. However, the government has set sector-specific ceilings on foreign assets in certain industries, such as basic and cellular telecommunications services, banking, retail and civil aviation.
 





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