27 reasons for setting up business in india

KLC & Co. Chartered Accountants; www.klcandco.com

It has always been a debate among the Global business
lobby about their expansion plans in India. There have
ups and downs, phases of political instability and
retrospective amendments and other reasons. Things
have changed since the stable Government was
formed in 2014 and this is well justified by the foreign
investors confidence in Indian economy and influx of
Foreign Direct Investment into India. We at KLC & Co.
provide a list of Advantages to Register a Business in
India or Invest into India, which may help foreign
investor calculate the global positioning of India as a
favourable destination to invest.

1. Growth Rate:
a. IMF in 2014 projected Indian Economy is
expected to grow at 6.3% in 2015 and 6.5% in
2016 when it is likely to cross China’s projected
growth rate
b. Recent report by World Bank Report India
is set to emerge as the world’s fastest-
growing major economy by 2015 ahead of
China. India’s Gross Domestic Product (GDP)
is expected to grow at 7.5 per cent in 2015, as
per the report.
2. India is World’s largest democracy inhabiting 1.2
billion people across its length and breadth

3. Large area with great opportunities: It has a total Land Area
of 3.288 million km² and a large size and is ranked 7 in terms of
land area in the world.
4. Increasing faith of overseas investors:
There is a continuous inflow of Foreign Direct Investment in
India, now leniently allowed across several industries. FDI to
India.
a. In January 2014 : US$ 2.18 billion
b. In January 2015: US$ 4.48 billion, the highest
inflow in last 29 months On fiscal year basis inflows
touched a record high of US$ 34.9 billion in 2015
compared to US$ 21.6 billion in the previous fiscal
year, according to a Nomura report.Thereport indicated
that the net FDI inflows reached to 1.7 per
cent of the GDP in 2015 from 1.1 % in the
previous fiscal year.

5. There is a very Stable political environment
in India at present with the Bhartiya Janta Party
securing above 51% seat in the Lok Sabha. The country
also has a very responsive administrative set up. There
are Judicial measures to check the implementation of
administrative policies with the Right to Informations
Act, 2005 amongst other control & check mechanisms.
6. Well established judiciary to enforce rule of law.
Indian Supreme court is the Apex Court of the country

7. Land of abundant natural resources and diverse climatic
conditions.
It has major reserves of
a. Natural Gas –1,437 billion cubic metres
(50.7×1012 cu ft)
b. Oil – 125 Million metric tonne
c. Copper Ore – 1.56 billion tonnes of Copperore
d. Iron Ore – 27 billion tonnes
e. Chromite – 200 million tonnes of resource
f. Nuclear Reserves:
i. Thorium – 11.93 million tonnes
ii. Uranium – Upcoming mine in Tumalapalli
has close to 49,000 tonne of uranium reserves
8. Indian Government has been introducing various investor
friendly policies like ‘Digital India’ & ‘Make in India’.

9. India’s economy will grow fivefold in the next 20 years
(McKinsey).
10. Overall Cost competitiveness with low labour costs: As per
a report by Boston Consulting Group, India is ranked number 2
globally on the cost competiveness. China & Brazil which were
earlier considered as low cost manufacturing countries have
slipped from their positions indicating an eroding of their cost
competiveness.
11. India has a Total labour force of nearly 530 million
12. Large pool of skilled manpower with sound knowledge
base and significant English speaking population. As per
Wikipedia India is 2nd most English Speaking population in the
world after USA.

13. India is a young country with a median age of 30 years by
2025. Giving it another edge over its counterpart China where
the population median is much higher, this in turn makes it a
strategic investment partner.
14. The proportion of population in the working age group (15-
59 years) is likely to increase from approximately 58 per cent in
2001 to more than 64 per cent by 2021.
15. Huge untapped market potential with a consumer size of
1.25 billion.
16. The urban population of India will double from the 2001
census figure of 290 m to approximately 590 m by 2030
(McKinsey).

17.Tax Exemptions:
Special investment privileges like tax exemptions, Progressive
simplification and rationalization of direct and indirect tax
structures.
18.India has got a well – knit transportation system through
all the three mediums of Air, Water & Land.
a. Airports : The Airports Authority of India
(AAI) manages a total of 125 Airports.
b. International Airports :
Ahmedabad, Amritsar, Bengaluru, Chennai,
Goa, Guwahati Hyderabad, Kochi, Kolkata,
Mumbai, New Delhi, Thiruvananthapuram,
Port Blair, Srinagar, Jaipur, Nagpur, Calicut,
Tiruchirapalli, Coimbatore.

c. Railways: The Indian Railways network is spread
over some 64,000 km, with 12,000 passenger and
7,000 freight trains each day from 7,083 stations
plying 23 million travellers and 2.65 million tonnes of
goods daily.
d. Roadways: India’s road network of 4.1 million km is
the second largest in the world. With the number of
vehicles growing at an average annual pace of
10.16%, Indian roads carry about 65% of freight and
80% of passenger traffic
e. Waterways: 14, 500 km Major Port of
Entry: Chennai, Ennore, Haldia, Jawaharlal Nehru Port
Trust(JNPT), Kolkata, Kandla, Kochi, Mormugao,
Mumbai, New Mangalore, Paradip, Tuticorin And
Vishakhapatnam.

19. The improvement in India’s economic fundamentals has
accelerated in the year 2015 with the combined impact of
strong government reforms, RBI’s inflation focus supported by
benign global commodity prices.
20. Massive Troop size: Globally Ranked 3rd out of 166
countries with a total of 1,325,000 active troops and 2nd in size
of armed forces. This is another reason why Foreign Direct
Investment is now shown a ray of light defence sector.
21. Industrial Production Index : India’s IIP grew by 4.1 per cent
in April 2015 compared to 2.5 per cent in March 2015. This
growth is majorly credited to the boost in manufacturing
growth, which was 5.1 per cent in April compared to 2.8 per
cent in the previous month.

22. Telecommunications : India is Ranked 2nd in
Mobile phone use.
23. Internet Connectivity : India is Ranked 3rd in
number of internet users. Further, the Indian
Government is proposing to invest in Rural Networking
systems to make rural India have internet
connectivity.
24. Major Sectors Attracting Highest FDI Equity
Inflows: Services Sector, Construction Development,
Telecommunications, Computer Software and
Hardware, Drugs and Pharmaceuticals, Automobile (as
in Feb 2015).

25. Governments New Policies have indicated a reduction in
import tariffs.
26. India has a Full current account convertibility.
27. India is member of WTO.
Sources : In house Research
Wikipedia
Mckinsey Reports
Press Releases

KLC & Co.
CHARTERED ACCOUNTANTS
This document is confidential and meant for presentation only. The technical
contents herein are solely meant for information and not professional advice. We do
not take responsibility for accuracy or correctness of Business Decisions taken without
seeking professional advice.

27 reasons for setting up business in india

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