Investing in India means adopting a bold strategy

The investment scenario in India speaks volumes about the steady inflows of foreign direct investment (FDI) into India. Despite the global economic downturn, investment inflows have been pouring into the country in encouraging numbers. Total FDI inflow during April-December 2009-10 was US$ 21.5 billion as compared to US$ 21.15 billion during the corresponding period of 2008-09.

Investing in India is now one of the most acceptable norms world over with investors from foreign venture capital funds to overseas individual investors taking interest. In fact, a recent report by a leading economist from Goldman Sachs, Brent Ciliano, indicated that investment opportunities in India are aplenty and investors from the US should adopt bold investment strategies by including the Indian market in their portfolios.

Opportunities in healthcare, education, manufacturing, infrastructure and services sectors are growing steadily. The services sector has in fact, been garnering maximum FDI inflows consistently over past two years.

As a part of the agenda of the government of India to promote the inflows, the department of Industrial Policy and Promotion (DIPP) too has been reworking and redrafting the foreign direct investment policies into a single user-friendly framework. The framework is expected to be released by end March, 2010, as recently announced by Mr Anand Sharma, Union Minister of Commerce and Industry.

The government recently in February 2010 in a significant move also allowed the Foreign Investment Promotion Board (FIPB), under the commerce ministry, to clear foreign direct investment (FDI) proposals of up to Rs 1,200 crore. Previously, the total project cost, including the foreign equity inflow, was taken into consideration in deciding whether the proposal is to be put up for Cabinet Committee of Economic Affairs (CCEA) consideration. The new move will now allow only the proposals involving a foreign equity inflow of more than Rs 1,200 crore to be evaluated by CCEA. The Home Minister P Chidambaram said the relaxation would hasten the process and expedite FDI inflow into India.

Of late, investment experts such as Stephen Dover, managing director and international chief investment officer for Franklin Templeton Investments' Local Asset Management groups, have agreed that India's favorable demographics provide boost in consumption. Dover also remarked that the exchange rate is freer in India and that the company would make a long-term bet on India rather than China.

The positive and strong post-budget rally, after the budget was announced in the last week of February 2010, too has seen the net inflows into India from foreign institutional investors touch US$ 2-billion this fiscal. India has been one of the better performing emerging markets, owing to increased quantum of FII inflows, especially in the past few weeks.

About the Author: Harjeet is an Indian - born mass-market novelist, who covers the world internet related topics . He writes columns and articles for various websites and internet journals in the domain of Indian economy and investment strategies.