Finance

Investment Opportunities in India

Potential for investment in India

-› The Government is focusing on expansion and modernization of roads and has opened this up for private sector participation. 48 new road projects worth US$ 12 billion are under construction. Development and upgradation of roads will require an investment of US$ 24 billion till 2008. Private sector participation in road projects will grow significantly. Special incentives and tax-breaks are given for certain sectors such as power, electronics, telecom, software, hydrocarbons, R&D and exports.


-› The railway sector will need an investment of US$ 22 billion for new coaches, tracks, and communications and safety equipment over the next ten years.


-› Upgradation and modernization of airports will require US$ 33 billion investment in the next ten years.


-› There is potential for investment in the expansion and modernization of ports. The government has taken up a US$22 billion 'Sagarmala' project to develop the Port and Shipping sector under Public-Private Partnership. 100 percent FDI is permitted for construction and maintenance of ports. The government is offering incentives to investors.


-› The Ministry of Power has formulated a blueprint to provide reliable, affordable and quality power to all users by 2012. This calls for investment of US$ 73 billion in the next five years. Opportunities are there for investment in power generation and distribution and development of non-conventional energy sources.


-› There is potential for investment in urban infrastructure projects. Water supply and sanitation projects alone offer scope for annual investment of US$ 5.71 billion.


-› The entire gamut of exploration, production, refining, distribution and retail marketing present opportunities for FDI.


-› India has an estimated 85 billion tones of mineral reserves remaining to be exploited. Potential areas for exploration ventures include gold, diamonds, copper, lead zinc, cobalt silver, tin etc. There is also scope for setting up manufacturing units for value added products.


-› The telecom market, which is one of the world's largest and fastest growing, has an investment potential of US$ 20-25 billion over the next five years. The telecom market turnover is expected to increase from US$ 8.6 billion in 2003 to US$ 13 billion by 2007.


-› The IT industry and IT-enabled services, which are rapidly growing offer opportunities for FDI.


-› India has emerged as an important venue for the services sector including financial accounting, call centers, and business process outsourcing. There is considerable potential for growth in these areas.


-› Biotechnology and Bioinformatics, which are in the government's priority list for development, offer scope for FDI. There are over 50 R&D labs in the public sector to support growth in these areas.


-› The Indian auto industry with a turnover US $ 12 billion and the auto parts industry with a turnover of 3 billion dollars offer scope for FDI.


-› The government is encouraging the establishment of world-class integrated textile complexes and processing units. FDI is welcome.


-› While India has abundant supply of food, the food processing industry is relatively nascent and offers opportunities for FDI. Only 2 percent of fruits and vegetables and 15 percent of milk are processed at present. There is a rapidly increasing demand for processed food caused by rising urbanization and income levels. To meet this demand, the investment required is about US$28 billion. Food processing has been declared as a priority sector.


-› The Healthcare industry is expected to increase in size from its current US$ 17.2 billion to US$ 40 billion by 2012.


-› The Government has recently established Special Economic Zones with the purpose of promoting exports and attracting FDI. These SEZs do not have duty on imports of inputs and they enjoy simplified fiscal and foreign exchange procedures and allow 100% FDI.


-› The travel and tourism industry which has grown to a size of US$ 32 billion offers scope for investment in budget hotels and tourism infrastructure.