INVES

T IN
INDIA

Dated: 11th September 2023

INTRODUCTION

The economy of India has transitioned from a mixed planned economy to a mixed middle-
income developing social market economy and largest South Asian economy with
notable public sector in strategic sectors. It is the world's fifth-largest economy by nominal
GDP and the third-largest by purchasing power parity (PPP). According to the International
Monetary Fund (IMF), on a per capita income basis, India ranked 139th by GDP
(nominal) and 127th by GDP (PPP).
Since the start of the 21st century, annual average GDP growth has been 6% to 7%. The
economy of the Indian subcontinent was the largest in the world for most of recorded
history up until the onset of colonialism in early 19th century. India accounts for 7.2% of
the global economy in 2022 in PPP terms, and around 3.4% in nominal terms in 2022.
The GDP growth in the fourth quarter has pushed up the full-year GDP growth of FY2022–23
to 7.2%, 200 basis points (bps) higher than the earlier estimate. The recently
released Annual Economic Review for the month of May 2023 highlighted that the post
pandemic quarterly trajectories of consumption and investment have crossed pre pandemic
levels. India grew by 6.1% in the last quarter, which is approximately 100 bps higher than
what the market had anticipated. While the overall growth was broad-based, many sectors
such as construction and agriculture experienced more-than-expected growth. In fact,
strong growth in manufacturing proved to be a reassuring development as modest growth in
the sector in previous quarters had been a concern for policymakers.
Overall, the first-quarter data of FY2024 instils confidence in the improving health of the
economy. Inflation in the first quarter was 4.5%, the lowest since the quarter of September
2019. Goods and Services Tax collections remain strong, suggesting that revenue buoyancy
will aid in improving the budgeted fiscal deficit ratio to GDP. At the same time, India’s
external account has been improving, thanks to the falling import bills as oil prices ease.
The document aims to provide a persuasive and well-researched case for why investors
should consider allocating their capital to this opportunity.
RECENT DEVELOPMENT IN INDIA

Figure 1: source: https://www.ibef.org/

India ranks third among the most attractive investment destinations for technology
transactions in the world. With more and more multinational companies setting up their
R&D centres in India, the sector has seen an uptrend in investment in recent years.
India is among the top countries globally in the field of scientific research, positioned as one
of the top five nations in the field of space exploration. The country has regularly undertaken
space missions, including missions to the moon and the famed Polar Satellite Launch Vehicle
(PSLV). India is likely to take a leading role in launching satellites for the SAARC nations,
generating revenue by offering its space facilities for use to other countries.
The government has introduced multiple policies aimed at projecting India as a science and
technology powerhouse and promoting both public and private sector involvement in the
R&D practice. As a result, India’s gross expenditure on R&D (GERD) has been consistently
increasing over the years. The government has also implemented several fellowship schemes
to nurture the human capacity for advanced research in the country.
Some of the recent developments in the field of science and technology in India are as
follows:

 In November 2022, Norwest Venture Partners agreed to invest US$ 32 million in

Cerebral Technologies, which specialises in AI, big data, and enterprise cloud among
other technologies. In exchange, Norwest Venture Partners will acquire a minority
stake in the company.
 In August 2022, a centre of excellence (CoE) for the Metaverse and Web3
technologies was opened in India by Coforge, a provider of digital services and
solutions. Over 1,000 people will be trained and upskilled by the company.
 In August 2022, Samsung announced that it was expanding its industry-academia
program PRISM (Preparing and Inspiring Student Minds) across 70 engineering
 colleges in India. The program will help educate students in the domains of artificial
intelligence, machine learning and IoT.
 Technology incubator T-Hub launched the semiconductor companion of the AIC T-
Hub Foundation programme to develop innovation and entrepreneurship across the
semiconductor sector startups.
 Actis, a global investor in sustainable infrastructure, is planning to invest over US$
700 million to acquire and expand assets for its platform aimed at offering real estate
to tenants in the life sciences and allied sectors in India.
 In March 2022, Toyota launched its Mirai hydrogen fuel cell car in India. The Indian
Oil Corporation would be supplying hydrogen to power the car.
 India's Top 5 IT firms (TCS, Infosys, Wipro, HCL and Tech Mahindra) added more than
122,000 employees in the first six months of FY22, nearly matching the 138,000
employees hired in the entirety of FY21.
 In October 2021, Biz2Credit, a fintech company, announced a plan to invest US$ 100
million in India over the next five years in research and development activities and
expansions.
 From 2014 to 2021, India recorded a 572% growth in patent approvals.
 To accelerate digital innovation in India, NITI Aayog, Amazon Web Services and Intel
have come together to develop a new experience studio to boost problem-solving
and innovation between government stakeholders, start-ups, enterprises, and
industry experts. The new experience studio will use technologies such as artificial
intelligence, machine learning, Internet of Things, augmented reality, virtual reality,
blockchain and robotics to accelerate their use in the public sector.
 TechnoPro, a Japanese tech firm, plans to hire 10,000 engineers and researchers in
India by 2022-23.
 Qualcomm plans to invest US$ 8.5 million on design initiatives in India, which would
include funding its innovation labs at Hyderabad and Bangalore for R&D.
INVESTMENT CLIMATE IN INDIA

Parliament passed the Taxation Laws (Amendment) Bill on August 6, 2021, repealing a law
adopted by the Congress-led government of Manmohan Singh in 2012 that taxed companies
retroactively. The finance minister also said the Indian government will refund disputed
amounts from outstanding cases under the old law. While Prime Minister Modi’s
government had pledged never to impose retroactive taxes, prior outstanding claims and
litigation led to huge penalties for Cairn Energy and telecom operator Vodafone. Both Indian
and U.S. business have long advocated for the formal repeal of the 2012 legislation to
improve certainty over taxation policy and liabilities.
India continued to increase and enhance implementation of the roughly $2 trillion in
proposed infrastructure projects catalogued, for the first time, in the 2019-2024 National
Infrastructure Pipeline. The government’s FY 2021-22 budget included a 35 percent increase
in spending on infrastructure projects. In November 2021, Prime Minister Modi launched
the “Gati Shakti” (“Speed Power”) initiative to overcome India’s siloed approach to
infrastructure planning, which Indian officials argue has historically resulted in inefficacies,
wasteful expenditures, and stalled projects. India’s infrastructure gaps are blamed for higher
operational costs, especially for manufacturing, that hinder investment.
The government has introduced “Make in India” and “Self-Reliant India” programs that
include investment policies designed to promote domestic manufacturing and attract foreign
investment. The “Digital India” program aims to open new avenues for the growth of the
information technology sector. The “Start-up India” program creates incentives to enable
start-ups to become commercially viable and grow. The “Smart Cities” program creates new
avenues for industrial technological investment opportunities in select urban areas.
According to the Ministry of Finance, India’s overseas direct investment (ODI) stood at
$17.53 billion in FY2021-22 compared to $12.10 billion in FY2020-21. In FY 2022-23 (April-
September 2022), ODI stood at $9.83 billion. Singapore was the top investment destination
for Indian companies accounting for $1.14 billion in FY2022-23 (April-September 2022). This
was followed by the United States with $780 million and Mauritius with $124 million.
However, Invest India is the government’s lead investment promotion and facilitation
agency and is managed in partnership with the DPIIT, state governments, and business
chambers. Invest India works with investors through their investment lifecycle to provide
support with market entry strategies, deep dive industry analysis, partner search, and policy
advocacy as required.
GOVERNMENT POLICIES THAT FAVOUR FOREIGN INVESTMENT

1. The Indian government has raised the limit for foreign direct investment (FDI) in the
defence sector to 74% through the automatic route and 100% through the
government route.
2. Amendments to the Foreign Exchange Management Act (FEMA) now permit up to
20% FDI in LIC, an insurance company, through the automatic route.
3. The government is considering easing scrutiny on certain FDI from neighbouring
countries.
4. The initiatives such as PM Gati Shakti, single window clearance, and the
establishment of a GIS-mapped land bank are anticipated to facilitate an increase in
FDI inflows.
5. The Space Activity Bill, expected to be introduced in 2022, will define FDI regulations
in the Indian space sector.
6. In September 2021, India and the UK agreed to enhance trade and strengthen
bilateral ties through increased investment.
7. The Union Cabinet announced in September 2021 that 100% FDI in the telecom
sector would be allowed via the automatic route.
8. In August 2021, amendments to the Foreign Exchange Management Rules raised the
FDI limit in the insurance sector by 74%.
9. Special Economic Zones (SEZs) have been established with top-notch facilities,
providing tax exemptions for the first five years.
10. Labor laws have been made more flexible to incentivize companies and increase
profitability.

STEPS TAKEN BY RBI

The Reserve Bank of India (RBI) has implemented several measures to enhance foreign
exchange (forex) inflows. These measures comprise:
1. Exempting incremental deposits in Foreign Currency Non-Resident (Bank) [FCNR (B)]
and Non-Resident (External) Rupee (NRE) accounts from the Cash Reserve Ratio
(CRR) and Statutory Liquidity Ratio (SLR) requirements.
2. Granting permission to banks to raise fresh FCNR (B) and NRE deposits without
adhering to existing regulations on interest rates until the end of October 2022.
3. Including all new issuances of Government Securities (G-Secs) with 7-year and 14-
year tenors under the Fully Accessible Route (FAR) for Foreign Portfolio Investors
(FPIs).
4. Exempting FPI investments in G-Secs and corporate debt made until October 31,
2022, from the short-term limit.
5. Allowing Foreign Portfolio Investors (FPIs) to invest in commercial paper and non-
convertible debentures with an original maturity of up to one year.
6. Temporarily increasing the limit for external commercial borrowings (ECBs) under the
automatic route from US$ 750 million or its equivalent per financial year to US$ 1.5
billion.
7. Raising the all-in cost ceiling under the ECB framework by 100 basis points, subject to
the borrower having an investment-grade rating.
8. Granting permission to Authorized Dealer Category-I (AD Cat-I) banks to utilize
overseas foreign currency borrowings for lending in foreign currency to entities for a
broader range of end-use purposes, in addition to exports.
REITERATING THE COMPELLING INVESTMENT OPPORTUNITY IN INDIA
India stands at the cusp of transformation, poised for exceptional economic growth and
prosperity. The recent positive developments in the country have illuminated the path to a
future rich with opportunities for investors. As we conclude this proposal, we reiterate the
compelling investment opportunity that India presents considering these remarkable
advancements.

UNLOCKING INDIA'S POTENTIAL: RECENT NEWS HIGHLIGHTS

The recent news headlines have been nothing short of inspirational for those considering
investments in India. From groundbreaking policy reforms to visionary infrastructure
projects and the rapid digital transformation of industries, India's ascent as an investment
destination of choice is unmistakable.
Policy Reforms and Regulatory Easements: The Indian government's unwavering
commitment to economic reforms has led to a conducive investment climate. Recent
regulatory easements, simplification of taxation, and measures to improve the ease of doing
business have unleashed the potential for investors to thrive in a more business-friendly
environment.
Infrastructure Revolution: India is amid a transformative infrastructure revolution. Ambitious
projects in sectors like transportation, logistics, and urban development are not only creating
employment opportunities but also laying the foundation for long-term economic growth.
The investment prospects within these projects are monumental.
Digital Innovation and Tech Leadership: India has emerged as a global hub for digital
innovation and technology leadership. Recent news stories have highlighted the rapid
expansion of the tech ecosystem, including the proliferation of startups, the growth of
FinTech, and the adoption of cutting-edge technologies like Artificial Intelligence and
Blockchain.
Green and Sustainable Initiatives: India is committed to sustainability and environmental
stewardship. Recent initiatives such as the National Solar Mission and ambitious plans for
electric vehicle adoption have opened substantial opportunities for investors looking to
support environmentally responsible projects.

THE TIME TO ACT IS NOW: SEIZING THE OPPORTUNITY FOR GROWTH AND
PROFITABILITY
It is not merely the headlines, but the underlying trends and prospects that make investing
in India today an astute decision. As the world undergoes a profound shift in economic
dynamics, India is poised to become a central player in the global economy. The time to act
is now.
  Diversification and Growth Potential: India offers diversification opportunities for
investors seeking to expand their portfolios beyond their home markets. The
country's vast consumer base, entrepreneurial spirit, and untapped markets present
the potential for remarkable growth and profitability.
 Supportive Government Initiatives: The Indian government's proactive measures to
attract foreign investment provide a supportive environment for investors.
Incentives, tax benefits, and streamlined regulatory processes make the investment
landscape more inviting than ever before.
 Infrastructure-Driven Sectors: The infrastructure-driven sectors, including
transportation, logistics, and urban development, present compelling opportunities
for investors seeking steady returns and long-term growth. With government
commitment and private-sector participation, these sectors are set to flourish.
 Tech and Innovation Hub: India's thriving technology ecosystem is a haven for
investors looking to be part of the digital transformation wave. From startups
disrupting traditional industries to established tech giants expanding their
operations, the technology landscape in India is replete with possibilities.
 Sustainability and Responsibility: As sustainability and social responsibility gain
prominence globally, investing in India's green initiatives aligns with ethical and
responsible investment goals. Supporting clean energy, environmental conservation,
and sustainable practices is not just profitable but also morally sound.
 Collaboration and Partnership: India welcomes investors not only with open arms but
also with a spirit of collaboration and partnership. Joint ventures, technology
transfers, and knowledge exchange opportunities abound, fostering mutually
beneficial relationships.

CONCLUSION: YOUR PATH TO PROSPERITY BEGINS HERE

In conclusion, the pages of India's economic story are being written with golden ink. The
recent news headlines serve as signposts to a future filled with prosperity, innovation, and
growth. It is with great enthusiasm that we extend this invitation to you—the visionary
investor, the astute entrepreneur, the forward-thinking corporation—to embark on a journey
of remarkable potential.
Invest in India, not merely for the promise of profit, but for the promise of participation in a
transformative economic narrative. Seize the opportunity presented by the recent positive
developments and the nation's unwavering commitment to progress. Your path to prosperity
begins here, in the heart of a resurgent India.
As you consider your investment options, remember that India is not just a destination; it's
an experience, an endeavour, and a commitment to a brighter future. We are here to guide
you, support you, and empower your investment journey in every possible way.
Contact us today to explore the countless opportunities that await you in India, and
together, let's script a story of success and shared prosperity.
Thank you for considering India—an investment opportunity like no other.
BIBLIOGRAPHY
 https://ksandk.com/corporate/strategies-for-attracting-higher-foreign-investment-in-
india
 https://www.state.gov/reports/2022-investment-climate-statements/india/
 https://www.ibef.org/industry/science-and-technology
 elibrary.worldbank.org
 www2.deloitte.com