Why
India?
Following
are some of the important issues one should consider.
- One of the
largest pool of talented software and technological man-power in the whole
world, particularly at a time when technology has taken driver's seat in
most of the developed economies.
- Large pool
of technology professionals (usually young generation) and others who are
working mostly in USA on work permits these days would indirectly bring
right things to India in medium to long run.Their foreign exchange earnings
would also help india balance current account deficits.
- One of the
largest economies in the world with lots of hidden potential and comparative
advantages. However the problem is the inward looking government policies
and tones of bureaucratic controls on business community.
- Strategic
location - access to the vast domestic and South Asian market. A large and
rapidly growing consumer market up to 300 million people, constitute the
market for branded consumer goods - estimated to be growing at 8% per annum.
Demand for several consumer products is growing at over 12% per annum.
- Foreign investment
is welcome, approval is required but is automatic in sixty categories of
Industries. However big problem is that government creates significant interference
with market forces with frequent changes in excise, custom and local sales
taxes. This creates a lack of long-term policy structure which is the main
problem for foreign investors.
- Professional
managers and entrepreneurial persons are available at competitive cost.
However they need to spend more than half of their time compiling to government
regulations, bureaucrats' harassment and other non-productive matters. Getting
justice is tiresome and often takes years.
- The lack of
enforcement in property rights is one of the biggest failures of Indian
government. Skilled labor at world's most competitive rates. They want to
work but there are no jobs for them.
- One of the
largest manufacturing sectors in the world, spanning almost all areas of
manufacturing activities.
- One of the
largest pools of scientists, engineers, technicians and managers in the
world.
- Rich base
of mineral and agricultural resources.
- Long history
of market economy infrastructure but government does alter market forces
which is unhealthy and has created lot of deadweight in most of the markets
(Deadweight? Ask any economist.)
- Sophisticated
financial sector. One of the world's best online trading systems in stock
exchanges. Vibrant capital market with over 9,000 listed companies and market
capitalization of US$ 154 billion (March,1996).
- Well developed
R&D infrastructure and technical and marketing services. Policy environment
that is becoming more positive from 1990s onwards towards more freedom of
entry, investment, location, choice of technology, production, import and
export. Most of the stocks are available at very attractive P/Es and many
firms are quoted at much less market capitalization than their real values.
- English is
widely spoken and understood. Rupee is convertible on Current Account at
market determined rate. Capital account convertibility can also be expected
in future. Free and full repatriation of capital, technical fee, royalty
and dividends. Foreign brand names are freely used.
- No income
tax on profits derived from export of goods. Complete exemption from Customs
Duty on industrial inputs and Corporate Tax Holiday for five years for 100
per cent Export Oriented units and units in Export Processing Zones. Corporate
Tax applicable to the foreign companies of a country with which agreement
for avoidance of Double Taxation exists, can be one which is lower between
the rates prevailing in any one of the two countries and the treaty rate.
- A long history
of parliamentary democracy but unstable governments. Comments?
Questions?
Suggestiong? eMail it: mailto:pateljr@hotmail.com
