2. INDIAN Reforms-The Philosophy Plug into the Global Economy Large scale economic reforms FDI recognised as a Growth Driver
3. India – A Good Place to Put Your Money Second Largest Emerging Market Largest democracy – political stability & consensus on reforms Liberal & transparent investment policies Fourth largest Economy (PPP) - A safe place to do business Largest reservoir of skilled manpower Long-term sustainable Competitive advantage - High growth rate economy
4. FDI Attracting long-term foreign capital to supplement domestic investment efforts, particularly in infrastructure and export competitive sectors Developing attractive Configurations of locational advantages at global level Promoting technology and other linkages to enhance domestic industry competitiveness Creating skilled employment Opportunities and Import of world Class managerial practices
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6. The “confidence” called India One of the fastest growing economies, second only after China Fourth-largest economy on purchasing power parity basis 3rd in investor confidence for FDI investments India offers the best return on investment among emerging markets “ The Time is now..to be in India. This is perhaps the most optimistic I’ve felt about India in the last 10-15 years that I’ ve been coming here.” – Jeffrey Immelt
7. Global Business Leaders on India “ India is a developed country as far as intellectual capital is concerned” “ India has evolved into one of the world’s leading technology centres. ” “ India can be the test bed for developing solutions for the poorest nations. ” “ India is handling the most sophisticated projects in the world. I am impressed with the quality of work” JACK WELCH, GE GERARD KLEISTERLEE , PHILIPS CRAIG BARRET, INTEL BILL GATES, MICROSOFT
11. Global Leaders from India One of the top IT Services company in the world World’s largest refinery plant Largest producer of motorbikes in the world World’s largest producer of terry-towels World’s 2nd largest forging company with outsourcing to major car manufacturers World leader in viscose staple fibre and 3rd largest producer of insulator Amongst top 3 truck manufacturers in the world World’s largest tube based television manufacturer 3rd largest producer of optical storage media in the world
22. Rationalisation of FDI Policy Allowed selectively up to 40% Up to 51% under Automatic Route for 35 Priority Sectors up to 74/51/50% in 112 sectors under Automatic Route 100% in some sectors Up to 100% Under Automatic Route in all sectors except a small negative list More sectors opened Equity caps raised Procedures simplified Pre 1991 1991 1997 2000 2000-05 Procedural further simplified New sectors opened Equity caps raised 2006
23. Investing in India – Entry Routes Automatic Route Prior Permission (FIPB) Investing in India General Rule No prior permission required Inform Reserve Bank within 30 days of inflow/issue of shares By Exception Prior Government Approval needed. Decision generally within 4-6 weeks
24. FDI Approval Procedure Government Route for few sectors Automatic Route in most Sector RBI FIPB No permission required, only to notify RBI within 30 days of issue of shares to foreign investors Approval is granted generally in 30 days
<number>My brief presentation this morning is going to focus on the resurgence of India in the emerging World economic order and the attractiveness of India as an investment destination.
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China was rated as the most preferred destination. India was followed by USA at 3rd placeThe experts rated India at 3rd place after China and USAATKearney 2004- China and USA were at first two placesChina and USA were the other two hotspots in UNCTAD and Corporate Location SurveyIn Global Services Location Index the gap between India and China at 2nd place is more than the gap between China at 2nd place and Brazil at 10th place.India was rated as the best off-shoring destination last year also.
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As you see before you the reform measures have resulted in a sustained growth rate of over 6%. Both industry and services have registered a turnaround and the agriculture performance has attained stability. <number>
Our foreign exchange reserves have been growing steadily and we now have comfortable reserve balance of around US $ 35 billion. Similarly, the Rupee has also remained fairly stable, especially when compared with the steep devaluation in most of the Asian currencies. This is because we have been able to largely avoid the Asian crisis. <number>
Accordingly licensing has been virtually abolished, investment procedures have been simplified, capacity controls removed, tariff structure rationalized, exchange controls eased out, and the role of public sector has been redefined.
FDI up to 35% allowed under the automatic route in 35 priority areas in 1991The list of priority sectors expanded to 112 activities in 1997
Automatic route requiresInformation to RBI within 30 days of receipt of FDI, andInformation to RBI within 30 days of issue of shares to foreign investorFIPB comprises of Secretary DEA, Secretary IPP, Secretary NRI, Secretary Commerce, Secretary Economic Relations, MEA and Secretary of concerned Ministries
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FDI has been growing. Cumulative approvals are of the order of USD 60b and inflows USD 19.35b. US has been the major investor. Others are Japan, Germany, UK, etc. Energy and power have been the major recipients.
Prior Government approval required in the six sectors under compulsory licensing, purchase of shares in an existing Company and having previous joint venture require Government approval. In addition sectors where investment is not under automatic route would require prior Government approval.The list of FDI equity caps and the route of entry is available in the Manual circulated among the participants.
Latest AT KEARNEY Business Confidence Index ranks India as 6th best investment destination.ATKEARNEY have also ranked India among the top 10 tourist destinations.India is rated as the best destination for Business Process Outsourcing.India is also a major destination for venture capital<number>