The Economy:

Background:  India has undergone a significant transition in its economy since 1991. The most important changes in the governmental policies have been deregulation of industry, liberalizing foreign investment and the repatriation of money, lowering of taxes and tariffs and the simplification of regular regimes, especially for Foreign Direct Investment (FDI).

      The result of the policy change has been a great growth of the private sector, shift in the economy from one dependent on agriculture to a services-driven one, a dramatic growth in trade, and most significantly a huge increase in domestic consumption.

GDP:       India has had an average growth rate of 8.5% for the five years starting 2005, with 50% of the GDP attributed to domestic consumption, which has fueled the Indian economy growth.

Financial Markets:      The financial, credit and money markets are strong and stable, having reached maturity in the last few years.

High Growth Industries:       Broadly, the major sectors of industries that have withnessed a growth  are services, telecommunications, construction, electronic hardware and software, housing and real estate, the development of infrastructure such as power generation and supply, water supply and waste water treatment, roads and highways, ports and airports, mining, oil and natural gas, entertainment, hospitals and healthcare, banking and insurance.

      There has also been significant growth in manufacturing of pharmaceuticals, automobiles, and auto-parts as OEM for international players.

Newly opened Sectors:      In September 2012, the Indian government announced the opening of the retail, civil aviation sectors and espanding the criteria for investment in the infrastructure sector. 

       Facts from the Global Competitiveness Report for 2009-2010:

(1)               India has the fouth(4th) largest domestic market.

(2)               It has the 16th strongest financial markets.

(3)              It is the 28th in innovation.

(4)              It has the 25th strongest banking sector.

Destination for Foreign Direct Investment: India has been rated as the third most attractive destination for Foreign Direct Investment (FDI). It has come to hold this position as a result of having very high prospects for profitability, with a dramatic reduction in tariffs and taxes. In addition to the lowering of tax rates, both the Central and State governments have offered a broad range of incentives, including tax holidays in several industries.