FDI in India was led by professional, scientific, and technology services, manufacturing, and wholesale trade investments. India's direct investment in the U. The IMF estimates that India will continue to grow at between seven and eight percent in The election marked a turning point in investor sentiment, as a fractured minority government, seemingly unable to advance essential economic reforms, was displaced in favor of a government that had won on a platform of economic growth.
The advent of a BJP-led government at the center, combined with the monetary stewardship of Raghuram Rajan, the respected Governor of the Reserve Bank of India, made an immediate mark on investor sentiment.
Stabilized currency rates and improved economic performance seemed to demonstrate that an era of policy paralysis and populism had ended in favor of a business-friendly growth agenda. In January , the first 20 cities were announced, 13 more cities were selected in May and another 40 announced in June, The next group of winners is expected to be announced in June This program covers multiple sectors, but focuses primarily on water and wastewater, power, sanitation, solid waste management systems, efficient urban mobility and public transportation, IT connectivity, e-governance and citizen participation.
Central government funding is to be augmented by state and city budgets, with additional funds expected through public-private partnerships at the project level. On June 20, the Government of India GOI announced major changes aimed at further opening the economy to foreign investment. The long-awaited rules reinforce the government's plan to develop more business-friendly policies as India looks to spur job creation and maintain its growth momentum. This is second in a series of FDI openings by the Modi-led government, the earlier one being the liberalization of various sectors in November The government has also relaxed local sourcing requirements for single-brand retailers of high technology products.
Other measures have been taken by the Central and State Governments to facilitate manufacturing, improve the business environment, and promote the development of industrial corridors across India.
The Reserve Bank of India said in its June statement that the effects of demonetization on the broader economy are sector specific and transient. The BJP currently holds a majority in the lower house.
The successful passage of a constitutional amendment to establish a national Goods and Services Tax GST to replace the complex web of national and state-government taxes with a unified national tax system also looks on-track to be implemented by July 1, There are differences at the state level in the quality of governance, regulation, taxation, labor relations, and education levels.
Thus, while the outlook has improved considerably, objective conditions for doing business in India remain similar to years past.
Opportunities in the current scenario, however, are still abundant. Indian conglomerates and high technology companies are generally equal in sophistication and prominence to their international counterparts. Certain industrial sectors, such as information technology, telecommunications, pharmaceuticals, textiles and engineering are globally recognized for their innovation and competitiveness. Skip to content India Country Commercial Guide.
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