The last five years have seen India emerge as an acclaimed investment destination for global investors. Multinational businesses have begun to perceive the developing Indian market as an opportunity for growth, amid the on-going economic uncertainty. India has a growing young population with an increasing capacity to spend. And this is creating a powerful middle class demographic in the nation.
Here’s a look at four reasons why India is an attractive opportunity for global investors today –
1. Growing Consumer Base
In the year 2019, 67% of India’s 1.3 billion population was between 15 to 64 years of age. With a young population that strong, India is a thriving growing consumer base. In the last two years, we have seen multinational brands in the manufactured goods and services sector take root in the Indian market for this reason.
Not just that, the Indian youth population is a massive internet user base. For internet-based services such as e-commerce websites, messaging apps, and digital payments – India is the place to be. This year, we also see Silicon Valley giants like Google and Facebook tapping into India’s half a billion internet user base with innovative offerings.
2. India is Improving Ease of Doing Business Every Year
Multiple economic reforms rolled out by the Indian government, have helped India improve its ranking on the ease of doing business index. In 2019, India was ranked 63rd in the Ease of Doing Business Rankings by the World Bank. Sustained reforms in business laws such as no audit requirement for MSMEs with up to Rs 5 Cr turnover, implementing a unified sales tax (GST), and removal of draconian laws are some of the steps India has taken to achieve this milestone.
3. Indian Corporate Tax Laws & Rates Are Now The Most Competitive In The World
The Union Budget for the year 2020 announced various taxation reforms to favor global investors. Most importantly, a substantial cut in corporate tax for foreign investors was also declared. As compared to China, South Korea, or any other South Asian investment destination, India now has the lowest tax rate @ 15%.
With low taxation rates, no minimum alternate tax and a simpler taxation structure, India is a bright spot for investors around the world.
4. India Is an Upcoming Global Export Hub
India has an extensive education system and a literacy rate of almost 75%. An educated and skilled labor force is detrimental to manufacturing of exporting goods. To add to this, recent policy reforms and banking sector reforms, have given exporters easy access to finances whenever needed. Owing to these factors, India is steadily turning into a global exporting hub over the last decade. With industries such as automobiles, mobile phones and petroleum propelling the export capacity of the nation, India is set to become a global export hub by 2030. Global manufacturing giants such as Oppo phones and Daimler are set to begin manufacturing operations in India in 2020. A country’s capacity as an export hub is an important factor for foreign investors. India is seen exuding economic confidence as exports surge year after year.
Apart from the reasons mentioned above, the Indian government has relaxed FDI policy in various sectors in the last few years. Efforts are being made to streamline the banking system in the long term have also begun. In these unprecedented economic conditions, India is a safer investment destination that promises growth and better returns for global investors in the long run.
