Doing Business with India

Doing Business with India

India is the largest democracy and tenth largest economy in the world. India has a federal system of Government with clear demarcation of powers between the Central Government and the State Governments.

The Indian economy is the fourth largest economy of the world on the basis of Purchasing Power Parity (PPP). India’s real GDP growth averaged 7.6% per annum during the period 2002-03 to 2006-07. During 2006-07, real GDP growth accelerated to 9.4% from 9.0 % in 2005-06, more than the 5 to 6% average during the eighties and nineties. Growth in key sectors like infrastructure, services and manufacturing continues at almost 12% per annum. Growth in per capita income accelerated from 7.4% in 2005-06 to 8.4% during 2006-07. Per capita income growth averaged 7.1% per annum during the last four years (2003-2007), more than double the 3.4% per annum recorded during the eighties and nineties. The acceleration of economic activity is being supported by a significant rise in domestic savings and investment, and productivity gains.

India has a large middle class and 55% of its population is below the age of 25. Over 380 million Indians (72 million households) have an annual household income of over $10,000 (in PPP terms). This is expected to increase to 550 million by 2010. High economic growth and rising per capita income has resulted in high growth in the domestic market, which is the prime growth engine for Indian economy The economic reforms since the early nineties have unleashed a new entrepreneurial spirit creating a vibrant economy supported by rising per capita income.

Fast growing disposable incomes, increased availability and use of consumer finance and credit cards complement the keenness of the average Indian to adapt to and assimilate global trends. This has led to the creation of a rapidly growing consumer base and one of the world’s largest markets for manufactured goods and services.

India – with its consistent growth performance and abundant highly skilled manpower provides enormous opportunities for investments.

The 2007-08 Fiscal Year

The growth process continues apace. As per the estimates released by the Central Statistical Organization, real GDP at factor cost grew by 9 per cent in 2007-08.

  • India’s foreign exchange reserves increased from US$ 247.76 billion in 2006-07 to US$ 309.72 billon 2007-08. Indian forex reserves stand at US$ 300.01 billion as on August 08, 2008.
  • The foreign institutional investors (FIIs) brought in US$ 16.1 billion in 2007-08.
  • Foreign direct investment (FDI) inflows during 2007-08 stood at US$ 24.57 billion, up 56.50 per cent compared with US$ 15.7 billion in 2006-07. In fact, FDI inflows into India for June 2008 amounted to US$ 3.93 billion.
  • India achieved a record food grain production of 227 million tonnes in 2007-08, registering a growth of 10 to 12 million tonnes over 2006-07. Food grain output grew by 4.23 per cent in 2007-08, nearly double the average annual growth of 2 per cent between 1994 and 2004.
  • Overall industrial production grew by 8.5 per cent during 2007-08. Significantly, manufacturing sector grew at the rate of 8.8 per cent and construction at 9.8 per cent.
  • Services grew by 10.8 per cent in 2007-08. The trade, hotels, transport and communication segment grew by 12 per cent, while the financing, insurance, real estate and business services sector grew at 11.8 per cent. Community, social and personal services reported a 7.3 per cent rise in GDP in 2007-08.
  • While exports grew by 23.02 per cent during 2007-08 amounting to US$ 155.5 billion, imports increased by 27.01 per cent to US$ 235.9 billion in the same period. Further, exports in June 2008 amounted to US$ 14.6 billion while imports in June 2008 amounted to US$ 24.4 billion.

Per Capita Income

Per capita income in India increased from US$ 460 in 2000-01 to almost double to US$ 797 by the end of 2006-07. In 2007-08, India’s per capita income is estimated to be around US$ 740. Further, India’s per capita income is expected to increase to US$ 2,000 by 2016-17 and US$ 4,000 by 2025. This growth rate will, consequently, propel India into the middle-income category.
Some Highlights

  • Over 300 million Indians (63 million households) are expected to have a household income of over US$ 6,000 by 2015 [over US$ 30,000 in purchasing power parity (PPP) terms].
  • According to The World Fact Book, India is among the world’s youngest nations with a median age of 25 years as compared to 43 in Japan and 36 in USA. Of the BRIC—Brazil, Russia, India and China—countries, India is projected to stay the youngest with its working-age population estimated to rise to 70 per cent of the total demographic by 2030 – the largest in the world. India will see 70 million new entrants to its workforce over the next 5 years.
  • India has the second largest area of arable land in the world, making it one of the world’s largest food producers – over 200 million tonnes of foodgrains are produced annually. India is the world’s largest producer of milk (100 million tonnes per annum), sugarcane (315 million tonnes per annum) and tea (930 million kg per annum) and the second largest producer of rice, fruit and vegetables.
  • With the largest number of listed companies – 10,000 across 23 stock exchanges, India has the third largest investor base in the world.
  • India’s healthy banking system with a network of 70,000 branches is among the largest in the world. In June 2007, the aggregate deposits of commercial banks were about US$ 445 billion (50 per cent of GDP) and the total bank credit stood at US$ 320 billion (36 per cent of GDP). NPA (non-performing assets) levels of banks in India are under 3 per cent, one of the lowest among emerging nations.
  • According to a study by the McKinsey Global Institute (MGI), India’s consumer market will be the world’s fifth largest (from twelfth) in the world by 2025 and India’s middle class will swell by over ten times from its current size of 50 million to 583 million people by 2025.
  • The number of companies incorporated has increased at an annual average of 55,000 companies in the last two years to 865,000, from 712,000 companies at the end of 2005.
  • Twenty Indian companies including Bajaj Auto, Bharat Forge, Cipla, Ranbaxy, Reliance group, TCS, Tata Motors, Tata Steel, Wipro and Infosys have made it to the Boston Consulting Group’s 100 New Global Challenger Giants List, 2008.

Investment Climate in India

India has the most liberal and transparent policies on foreign direct investment (FDI) among major economies of the world. 100% FDI is allowed under the automatic route in all sectors/activities except in few areas, which require prior approval of the Government. Under automatic route, investors are required to only notify the Reserve Bank of India within 30 days of receipt of inward remittances. India is looking for large FDI inflows in the development of infrastructure, technological upgradation of Indian industry through ‘greenfield’ investments in manufacturing, and in projects having the potential for creating employment opportunities on a large scale. Indian government FDI in SEZs during the past 18 months has touched $3 billion. The Indian Government has formally approved 404 SEZs out of which 187 have been notified. SEZs enjoy several tax concessions including income tax exemption for a specified period under the SEZ Act 2005 and subsequent amendments.

Government of India accords high priority to development of infrastructure in highways, ports, railways, airports, power, telecom, etc. Government is actively seeking domestic and foreign private investment, for infrastructure sector development. The draft papers on the 11th Five Year Plan of India envisages that 30% of all investments in infrastructure development during the next five year period would be from private sector. The Indian Government is actively pursuing Public Private Partnership (PPPs) to bridge the infrastructure deficit in the country. Several initiatives have been taken to promote PPPs in sectors like power, ports, highways, airports, tourism and urban infrastructure. In India, services sector, as a whole, contributed as much as 68.6 per cent of the overall average growth in GDP between the years 2002-03 and 2006-07.

India has liberalized and simplified foreign exchange controls. Rupee is freely convertible on current account. Rupee is almost fully convertible on capital account for non-residents. For FDI- Profits earned, dividends and proceeds out of the sale of investments are fully repatriable; Most of the restrictions for resident Indians on capital account on incomes earned in India have also been removed, on account of huge accretion to foreign exchange reserves of India.

To know more information about Investment in India, please visit

http://dipp.gov.in/
http://www.dipp.gov.in/publications/fdi_policy_2006.pdf
http://www.investmentcommission.in/destination_india.htm

To learn about Indian economy in detail, please read the Annual Report published by the Indian Reserve Bank, available at http://rbi.org.in/scripts/AnnualReportPublications.aspx.

The Governments of the States and Union Territories of Indian also woo investors in their respective states and offer tax and other concessions. The List of Investment Promotion Agencies of State Governments in India is as follows:

Andaman & Nicobar (UT)
Andaman & Nicobar Islands Integrated Development Corporation Ltd (ANIIDCO)
Vikas Bhawan
A & N Islands
Port Blair – 744101
Tel: + 91 3192 232666
Fax: + 91 3192 235098
Website: http://www.aniidco.nic.in
Email: aniidco@vsnl.com

Andhra Pradesh
Andhra Pradesh Industrial Development Corporation Limited
Parishrama Bhavan,
5-9-58/B,Fateh Maidan Road
Post Box No.1049
Hyderabad – 500 004
Tel: + 91 40 23235253-56
Fax: + 91 40 23235516, 23236756
Website: http://www.apidc.org
Email: apidc@ap.gov.in

Arunachal Pradesh 
Arunachal Pradesh Industrial Development and Financial Corporation Limited
C Sector
Near Petrol Pump
Itanagar – 791 111
Tel: + 91 360 2212672, 2212673
Fax: + 91 360 2212672
Email: koyutony@yahoo.com

Assam 
Assam Industrial Development Corporation Ltd
RGB Road
Guwahati – 781 024
Tel: + 91 361 22003999
Fax: + 91 361 2202017
Email: aidcltd@gw1.dot.net.in

Bihar 
Bihar State Credit and Investment Corporation Ltd (BICICO)
4th Floor, Indira Bhawan,
Ram Charitra Singh Path
P.B. No. 204 GPO
Patna – 800 001
Tel: + 91 612 228552, 232277
Fax: + 91 612 234298
Website: http://www.bicico.com
Email: bicico@vsnl.net

Chandigarh (UT)
Chandigarh Industrial and Tourism Development Corporation Ltd (CITCO)
SCO 121-122
Sector 17-B,
Chandigarh
Tel: + 91 172 2704761, 2704356
Fax: + 91 172-2705288
Website: http://www.citco.nic.in
Email: info@citcochandigarh.com

Chhattisgarh
Chhattisgarh State Industrial Development Corporation Ltd
B-4, M.R Colony
Sailendra Nagar
Raipur
Tel: + 91 771 2429024, 5055888
Fax: + 91 771 2429025
Website: http://www.csidcindia.com
Email: csidc@csidcindia.com

Dadra & Nagar Haveli (UT) 
Omnibus Industrial Development Corporation of Daman & Diu and Dadra & Nagar Haveli Ltd
Paryatan Bhavan,
Nani Daman – 396210
Tel: + 91 260 2250743, 2250421, 2250903
Fax: + 91 260 2250328
Website: http://www.oidc.nic.in
Email: paryatan_ad1@sancharnet.in

Daman & Diu (UT)
Omnibus Industrial Development Corporation of Daman & Diu and Dadra & Nagar Haveli Ltd
Paryatan Bhavan,
Nani Daman – 396210
Tel: + 91 260 2250743, 2250421, 2250903
Fax: + 91 260 2250328
Website: http://www.oidc.nic.in
Email: paryatan_ad1@sancharnet.in

Delhi
Delhi State Industrial Development Corporation (DSIDC)
N Block Bombay Life Building
Connaught Circus
Delhi 110 001
Tel: + 91 11 23312013
Fax: + 91 11 23315067
Website: http://www.dsidc.org
Email: dsidc@nda.vsnl.net.in

Goa 
Goa Industrial Development Corporation (GIDC)
Patto, Next to Passport Office
Panaji, Goa 403 001
Tel: + 91 832 2437470 to 73
Fax: + 91 832 2228012
Website: http://www.goaidc.com
Email: goaidc@sancharnet.in 

Gujarat 
Gujarat Industrial Development Corporation (GIDC)
Block # 4, 2nd Floor
Udyog Bhavn, Sector 11
Gandhinagar – 382 017
Tel: + 91 79 23225811, 23225805, 23225816
Fax: + 91 79 23221191, 23225815
Website: http://www.gidc.gov.in
Email: info@gidc.gov.in

Haryana
Haryana State Industrial Development Corporation (HSIDC)
Plot No.13-14,
Institutional Area, Sector 6
Panchkula-134109
Tel: + 91 172 2590481-83
Fax: + 91 172 2590474
Website: http://hsidc.nic.in/hfi.htm
Email: hsidc@chd.nic.in

Himachal Pradesh
The Himachal Pradesh State Industrial Development Corporation (HPSIDC)
New Himrus Building
Circular Road
Shimla-171001
Tel: + 91 177 2624751, 2624752, 2624754, 2625422
Fax: + 91 177 2624278
Website: http://hpsidc.nic.in
Email: hpsidc@sancharnet.in

Jammu & Kashmir 
J & K State Industrial Development Corporation Ltd
Drabu House
Ram Bagh, Shere Kashmir Bhavan
Vir Marg, Srinagar,J&K – 190001
Jammu, J&K -180001
Tel: + 91 194 430036
Fax: + 91 194 430036

Jharkhand 
Directorate of Industry
Nepal House, 3rd Floor
Doranda, Ranchi
Tel: + 91 651 2491844
Fax: + 91 651 2491884
Email: doijharkhand@doijharkhand.net

Karnataka
Karnataka State Investment and Industrial Development Corporation (KSIIDC)
MSIL House No 36
Cunningham Road
Bangalore – 560 052
Tel: + 91 80 2258131
Fax: + 91 80 2255740
Website: http://www.ksiidc.com
Email: ksiidc@bir.vsnl.net.in

Kerala 
Kerala Industrial Infrastructure Development Corporation (KINFRA)
TC 31/2312 , KINFRA House
Sasthamangalam
Trivandrum – 695 010
Tel: + 91 471 2726585
Fax: + 91 471 2724773
Website: http://www.kinfra.com
Email: kinfra@vsnl.com

Lakshadweep (UT) 
The Director,
Department of Industries
UT of Lakshadweep,
Kavaratti – 682 555
Tel: + 91 4896 262325
Fax: + 91 4896 263132
Website: http://www.lakshadweep.nic.in/depts/industries/home.htm
Email: lk-doi@hub.nic.in 

Madhya Pradesh 
Madhya Pradesh State Industrial Development Corporation Ltd (MPSIDC)
AVN Towers, 192 Zone-1
M.P Nagar
Bhopal – 462011
Tel: + 91 755 5270370/246/247
Fax: + 91 755 5270280, 5203106
Website: http://www.mpsidc.org
Email: mpsidc@sancharnet.in

Maharashtra
Maharashtra Industrial Development Corporation Ltd (MIDC)
Udyog Sarathi
Mahakali Caves Road, Andheri (E),
Mumbai – 400 093
Tel: + 91 22 26870052 / 54 / 73, 26870800
Fax: + 91 22 26871587
Website: http://www.midcindia.org
Email: feedback@midcindia.org

Manipur 
Manipur Industrial Development Corporation Ltd
Industrial Estate
Takyelpat, P.B 46
Imphal – 795001
Tel: + 91 385 2223624, 2221967

Meghalaya 
Meghalaya Industrial Development Corporation Ltd
“Kismat”, Upland Road
Laitumkhrah
Shillong – 793 001
Tel: + 91 364 224965, 224763, 226941, 226893
Fax: + 91 91 364 224763
Website: http://www.meghalaya.nic.in/MIDC/midc.htm
Email: midc@shillong.meg.nic.in

Mizoram
Zoram Industrial Development Corporation
M.G Road
Upper Khatla
Aizawal 796001
Tel: + 91 389 2323217, 2326240
Email: zidco@sancharnet.in

Nagaland 
Nagaland Industrial Development Corporation (NIDC)
IDC House
P.B No 5
Dimapur 797 112
Tel: + 91 3862 226473
Fax: + 91 3862 226473

Orissa 
Orissa Industrial Infrastructure Development Corporation Ltd.
IDCO Tower, Janpath
Bhubaneswar – 751007
Tel: + 91 674 2540820, 2542784
Fax: + 91 2542956
Website: www.idcoindia.com/
Email: cmd@idcoindia.com

Pondicherry (UT) 
Pondicherry Industrial Promotion Development and Investment Corporation Ltd
Post Box. No. 190
60, Romain Rolland Street
Pondicherry – 605 001
Tel: + 91 413 2334606, 2335116, 2334361, 2336842
Fax: + 91 413 336842
Website: http://www.pipdic.com
Email: md@pipdic.com

Punjab
The Punjab State Industrial Development Corporation Ltd
Udyog Bhawan
18, Himalaya Marg
Sector – 17
Chandigarh
Tel:+ 91 172 2702881-84, 2702791
Fax:+ 91 172 2704145
Website: http://www.punjabgovt.nic.in/Industry/ind552.htm
Email: psidc@sancharnet.net.in

Rajasthan 
Rajasthan State Industrial Development Corporation Ltd
Udyog Bhawan
Tilak Marg
Jaipur – 302005
Tel:+ 91 141 5113201, 2227751
Fax:+ 91 141 5104804
Website: http://www.riico.co.in
Email: riico@riico.co.in

Sikkim 
Sikkim Industrial Development & Investment Corporation Limited (SIDICO)
Tashiling Secretariat
Gangtok – 737103
Tel:+ 91 3592 202530
Fax:+ 91 3592 202851
Website: http://www.sikkiminfo.net/sidico/

Tamil Nadu 
Tamil Nadu Industrial Development Corporation Ltd (TIDCO)
19-A, Rukmani Lakshmipathy Salai
Egmore
Chennai – 600008
Tel:+ 91 44 28554421
Fax:+ 91 44 28553729
Website: http://www.tidco.com
Email: cmdtidco@vsnl.com

Tripura 
Tripura Industrial Development Corporation Ltd (TIDC)
Gorkha basti Office Complex
PO: Kunjaban
Agartala – 799006
Tel:+ 91 381 220342
Website: http://www.tripura.nic.in/tidc/

Uttar Pradesh 
Uttar Pradesh State Industrial Development Corporation
UPSIDC Complex, A-1/4 Lakhanpur
Kanpur
Tel:+ 91 512 2582851, 2582852, 2582853
Fax:+ 91-512-2580797
Website: http://www.upsidc.com
Email: feedback@upsidc.com

Uttaranchal 
State Industrial Development Corporation of Uttaranchal (SIDCUL)
2, New Cantt Road
Dehradun 248001
Tel:+ 91 135 2743292/97, 2743838
Fax:+ 91 135 2743288
Website: http://www.sidcul.com
Email: sidcul@sidcul.com

West Bengal 
West Bengal Industrial Development Corporation (WBIDC)
5, Council Street House
Kolkata 700001
Tel:+ 91 33 22435343
Fax:+ 91 33 22483747
Website: http://www.wbidc.com
Email: chairman@wbidc.com

 

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