On the back of a stable government and strong economic fundamentals, the Indian economy is on a rebound. Having clocked a growth of 7.3% in 2014-15, India is back on the radar of foreign investors looking to tap into a market of 1.2 billion people.
In the last one year, the government has taken several steps to remove regulatory bottlenecks and improve the ease of doing business. These include significant amendments to the Companies Act, 2013, the launch of a single-window portal, ‘e-biz’ that integrates 14 central government services and the roll out of Make in India campaign.
The Prime Minister has also launched a new website – PRAGATI – to address public grievances and monitor the progress of various central government schemes. The portal is designed to keep every complainant engaged with the government machinery at the highest level and to ensure systemic corrections through the redressal of the complaints.
If the reform process being undertaken by the government continues unabated over the next few years, the country will move swiftly up the ranks on the World Bank’s Ease of Doing Business ranking. The government wants to see the country among „Top 30‟ in the next three years.
The government has also notified the rules for implementation of Ind AS, new Indian accounting standards that are converged with IFRS, and efforts are underway to introduce the new Goods and Service Tax (GST) regime by early next year.
According to a recent report by United Nations Conference on Trade and Development (UNCTAD), India made it to the list of top 10 destinations for foreign direct investments (FDI) in 2014, after failing to secure a position in the list a year ago. In 2014, the FDI inflows into India grew 22% to US$ 34 billion even though the global FDI fell by 16% to US$ 1.23 trillion.
India is a vast and diverse marketplace that is blessed with democracy, demographic and demand – the essential 3Ds, provides unparalleled opportunities but also has an intricate regulatory environment. Foreign investors which have succeeded in India, in our experience, consider all the alternatives in detail (export, greenfield, acquisition, joint venture) before deciding on which one to pursue.
This Guide is intended to serve as a primer for companies planning to enter the Indian market to tap the significant opportunities in various sectors. It aims to provide businesses information on the country‟s legal, accounting and taxation framework.
I hope this Guide will provide impetus to your growth plans of either setting up a base or expanding in India. We look forward to being your growth advisers in this land of new opportunities.
– Vishesh C Chandiok, National Managing Partner, Grant Thornton India LLP