The global economy is probably certainly caught in a severe recession caused by the coronavirus epidemic. Since “the entire world was attacked by the pandemic all at once,” the sudden halt in commercial operations poses a possibility of imposing economic suffering so profound and enduring that it could take years to recover.
Experts, nevertheless, state India is hopeful and guarantees that our country will remain one of the world’s favorite FDI locations in 2022. With the support of the Modi government’s liberalized norms, the country’s exuberant jump in the “Ease of doing business” ranking, and the anticipated modification in MIIUS (Modified Industrial Infrastructure Upgraded Scheme), which aims to promote emerging sectors, combat regulatory hurdles, and make India a manufacturing hub, the time has come to turn a crisis into a windfall.
In addition, the government seeks to become a world leader in 12 industries, including manufacturing, machinery, transmission lines, automobile corporations, leather goods, footwear, food processing, textiles, chemicals, and more. But despite the seeming simplicity of creating goals, the difficulties of really putting them into practice have always been a major obstacle.
As a result, the current government is planning to introduce a “Plug and play strategy,” wherein it will use the 23,000 hectares of undeveloped land in the Special Economic Zone to create a hub that provides land (for free) and basic facilities to investors. Manufacturing facilities can skip the two to three years of infrastructure preparation if they are provided with the power, transportation, and water that are already in place in these areas. As a result, the concept is promoted as a brilliant way to reduce the economic impact of the epidemic and advance the cause of special economic zones (SEZs) all at once.
A Renewing Economy Among The Fastest
- Foreign Direct Investment in India has surged by 37% since the government’s Made in India push.
- Numerous prominent investors and stakeholders identified India as the most alluring market for investment.
- The Prime Minister intends to increase manufacturing’s economic contribution from 15% to 25% of GDP.
- The government proposal for India to reach a 5 trillion economy by 2024.
The Rise Of Competition Around The World
- India is ranked 68th on the 2018-19 Global Competitiveness index.
- By merging indirect Taxes, the Goods and Services Tax (GST), the most significant tax reform since independence, lays the path for a national single market.
- By 2022, India will have the greatest youth population.
- India will have more economic influence in the Asia-Pacific region over the next five years.
Massive Local Market
- Individual consumption will quadruple by 2025.
- 2022 will see 50 billion dollars in Mergers and Acquisitions activity in the country.
- India’s increased consumption is primarily attributable to rising prosperity.
- The expanding Indian education sector offers several investment opportunities in both core and non-core divisions.
- India is significantly less susceptible to external shocks and pressure than other rising nations because every area of its consumer market is expanding.
An Attractive Financial Environment
- India is the most open and investment-friendly economy in the world, Prime Minister Narendra Modi said BRICS business executives in Brasilia.
- A Huge number of young people including technicians, financial consultants, and others.
- The Bombay Stock Exchange is the oldest market with the lowest transaction fees.
- Positive demographics in addition to an educated and expanding labour force.
Reliable India Based Infrastructure
- In 2018, India’s logistic performance was ranked 44th out of 167 nations by the World Bank.
- About the next three decades, over 350 Minnesota Indians will relocate to urban areas.
- “Housing for All” and “Smart City Mission” will guide the expansion of the industry.
- The interconnectedness of the Indian Railway has been steadily expanding, which is directly advantageous for Transportation.
Simplification Of Tax Direct Investment Regulations
- Tariff preferences and other tax benefits.
- Revision of Tax Treaties with several nations. reducing the corporate tax rate to 22% from 30%.
- Investment limit liberalisation in numerous areas (e.g., 100 percent FDI in the insurance business).
- Local sourcing requirements for FDI in the single-brand retail industry would be relaxed.
- Reduction of FDI restrictions in the defence, manufacturing, and coal mining industries.
- The finance minister suggested a tax exemption for sovereign wealth funds on Interest, Dividends, and Capital Gains derived from investments in the infrastructure sector until 2024.
- Increase the FPI investment limit in corporate bonds to 15%.
- NRIs will expand their government bond and security investments.
As a result, FDI will play a significant role in the next years, as India need massive investments to overhaul its infrastructure sector and as the Government will continue with FDI liberalisation this year to attract global companies in order to enhance growth and stimulate the economy. India also has a better chance of reviving economic momentum thanks to its favourable demographics.