Foreign Direct Investment in India

About Foreign Direct Investment in India:

 

Though India stands today as the largest democracy, its administrative as well as the political set up has many flaws and shortcomings. The Indian system of administration and governance is impregnated with flaws like shortages of power, bureaucratic hassles, political uncertainty, and infrastructural deficiencies .In spite of all these political shortcomings, India is perceived to be one of the most lucrative grounds for investing, in the eyes of the wealthy European as well as American investors. This is the true reason why the researches made into the sector establishes more and more foreign investors coming to India and investing liberally into the various sectors of the Indian economy.

Various Indian market sectors have experienced a recent progress and boom, owing to the investment made in them as well as due to the relaxation of rules and regulations that had been levied on the foreign direct investment in India, by the Indian government. One of such sectors of the Indian economy, that has seen a sudden booming phase of prosperity and sustained growth, owing to these factors is the real estate as well as the construction business in India. It was the year of 2005, when the Indian Central government finally realized the economic prosperity that foreign direct investment in India would bring about. Thus, in an effort to encourage this, the government made a crucial amendment to some of the governing laws on the subject, in order to allow one hundred per cent foreign direct investment in India, in the real estate and construction sector.Untill this point of time, the Indian law permitted only the non resident Indians (NRIs ) or persons of Indian origin(PIOs) to make foreign direct investment in India. Even these people had been levied with many restrictions. With the upliftment of these restrictions, a host of foreign investors and companies stormed India with their products, services and business ideas along with their money. This money in turn helped the Indian economy to grow in volume as well as statures

Many major industrialists and business tycoons expanded their businesses to India with the boom of foreign direct investment in India. Some of the major foreign investment houses, that have shown trust in the Indian economy, are Lee Kim Tah Holdings, Salim Group from Indonesia, Edaw Ltd., from USA, Emaar Group from Dubai, IJM, CESMA International Pvt Ltd, Ho Hup Construction Co., from Malaysia, Evan Lim and Keppel Land from Singapore etc. Japanese and Korean firms and businesses houses like Suzuki, Hyundai and Daichi have always trusted the automobiles as well as the pharmaceutical sectors for foreign direct investment. Many of the Indian sectors have thus benefited from these foreign direct investments, and in turn given lucrative returns to the investors as well. This is the reason why most of the investors keep looking towards India as a venue for investment.

The future prospects of these foreign investors in India look a bit gloomy at the moment due to the global meltdown and recession that the world is facing. But as the economies start to recover, the boom in the foreign direct investment segment is bound to return, and that t with a big bang.