Over the last month, India has been making quite a few changes to its foreign investment policy with a goal of facilitating more money coming into the country. So far, India has eased local-sourcing requirements for international businesses setting up shop in the country, lifted foreign investment restrictions in a multitude of industries, and has publicized a series of other measures meant to invite investment from overseas.
India is becoming an attractive place for foreign-investment as its economy is among the world’s fastest-growing. According to the Wall Street Journal, in the first six months of 2015, India recorded $19.4 billion in foreign direct investment, which is up 30% from the same period last year. Because of this enticing fact, India has has received even more interest from investors and has realized a surge in reserves.
Many of the foreign investment limits in India were raised to 100%, allowing industries within the country to become 100% foreign owned, leading a very progressive charge within India. Since the lifting of requirements, India has seen many bids for projects within its borders. Most recently, Japan has been approved by the Indian government for a $14.7 billion deal to build India’s first high-speed train line. In light of this deal, China has also been bidding to construct high-speed bullet train lines in India. Currently, this deal between India and Japan has been the leading foreign investment in India’s infrastructure.
With these foreign investment policy changes in India, it is just the beginning of investors taking hold of the opportunity to invest within the country. Over the next few years I project that we will be seeing additional deals between India and other countries regarding foreign investments. Make sure to keep an eye on the globalEDGE blog to keep ahead of this and other international business happenings.