India Emerges as a Prime Investment Destination for Global Investors, Fostering Innovation and Economic Development

Indian economy continues to be a bright star amidst the general gloom that has enveloped the rest of the world economies which are grappling with issues like Russia-Ukraine war, slowing investment, effects of the covid pandemic, global recessionary pressures and other economic uncertainties.
India's current situation is attributable to several positive aspects. Firstly, India has reclaimed its position as one of the fastest-growing markets globally in terms of GDP growth rate. This achievement showcases India's promising growth in various industries and sectors.
While there has been a slight decrease in the Foreign Direct Investments received in India in the last financial year 2022-23 but still most of the developed economies are reposing their confidence on the Indian economy for venturing and expansion of their businesses into India. India also has a competitive advantages to attract more Foreign Direct Investment due to various intrinsic factors such as the availability of young skilled and semi-skilled human pool, proficiency in English as a language, policy enabling environment, high demand and purchasing power expanding digital economy. With the economic rise of Tier2 and Tier3 cities, India has experienced a boost in its consumption growth as well.
Let's have a look at last year's Foreign Direct Investment numbers:
• Total FDI inflows in the country in the FY 22-23 is $ 70.97 Bn and total FDI equity inflows stands at $ 46.03 Bn.
• Top Investing Countries - Mauritius (26%), Singapore (23%), USA (9%), Netherland (7%) and Japan (6%) emerge as top 5 countries for FDI equity inflows into India FY 2022-23.
• Top 5 sectors receiving highest FDI Equity Inflow during FY 2022-23 are Services Sector (Fin., Banking, Insurance, Non-Fin/ Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other) (16%), Computer Software & Hardware (15%), Trading (6%), Telecommunications (6%) and Automobile Industry (5%).
• Top 5 States receiving highest FDI Equity Inflow during FY 2022-23 are Maharashtra (29%), Karnataka (24%), Gujarat (17%), Delhi (13%), and Tamil Nadu (5%).
Source - https://www.investindia.gov.in/foreign-direct-investment
"The CII-EY MNC Survey 2022 reveals that India has the potential to attract Foreign Direct Investment (FDI) flows of US$ 475 billion in just the next 5 years. The Indian government's consistent efforts to reduce regulatory barriers and improve Ease of doing business is also stoking the positive perception among MNCs."
Driving forces for Attracting FDI in Indian Economy
India is better positioned as compared to the rest of the world due to some of the initiatives taken by the government in terms of:
1. Ease of doing business, has facilitated investment inflows into the country. Multinational Companies (MNCs) consider ease of doing business EoDB as their first preference in terms of continuing the ongoing reform exercise. A large majority of businesses laud the government's consistent efforts for enhancing ease of doing business and over 60% feel that the business environment has considerably improved for them in last three years
2. Make in India - The flagship project "Made in India" was launched in 2014 under the dynamic leadership of the Hon'ble Prime Minister Shri Narendra Modi. Make in India has substantial accomplishments across the following six sectors -
• Automotive
• Electronics System Design & Manufacturing
• Renewable Energy
• Roads & Highways
• Pharmaceuticals
• Food Processing

The Project has transformed the country into a leading global manufacturing and investment destination. The Project has acted like an open invitation to potential investors and partners across the globe to participate in the growth story of 'New India'.
3. Production Linked Incentive (PLI) scheme - Production-linked incentives, particularly during the pandemic, have played a crucial role in stimulating growth and attracting global companies that were seeking alternative production hubs outside of China. The PLI Scheme was introduced across 14 key manufacturing sectors, in 2020-21 as a big boost to Make in India initiative. The main focus of the scheme is to incentivise domestic production in strategic growth sectors where India has comparative advantage.
The Government of India is also planning to launch a ₹3,500-crore production-linked incentive (PLI) scheme for Indian toy manufacturers.
4. PM Gati Shakti - The PM Gati Shakti National Master Plan was inaugurated in 2022 to accelerate the growth of Indian economy through the seven engines of progress - roads, railways, airports, ports, waterways, mass transports and logistics infrastructure.
5. The National Single Window System (NSWS) - NSWS has been soft-launched in September 2021 to improve the ease-of-doing-business by providing a single digital platform to investors for approvals and clearances required from Central and State governments thereby facilitating the entrepreneurs to apply for all applicable registrations/licenses on one portal.
6. SCOMET - The Government of India recently announced the Foreign Trade Policy 2023. With this policy, India is placing more emphasis on the "export control" regime as its integration with export control regime countries strengthens. There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) among stakeholders, and the policy regime is being made more robust to implement international treaties and agreements entered into by India.
Foreign Direct Investment is directly proportionate to fostering innovation. FDI has greatly helped Indian local enterprises in improving their innovation performance. For example, with the entry of foreign-funded enterprises, local enterprises can learn the technology and management experience of foreign-funded enterprises and imitate and increase their investment in research and development (R&D).
India is already on the path of becoming the fastest-growing economy in the world, having clocked 5.5% average gross domestic product growth over the past decade. With the population of 1.42 billion India is targeting to become the world's third largest economy by 2030.
It can be concluded that India's emergence as a prime investment destination for global investors is a testament to the country's commitment to fostering innovation and driving.

1st Floor, Golden Heights, Plot # 9, Opp:Raheja, Mindspace, Hyderabad, Telangana 500081

SimplyBiz provides managed services in the field of Advisory, Transactions, Business Setup, Compliance, Accounting and Taxation.

This release was published on openPR.