Slide 1

IS INDIA AN INVESTOR
FRIENDLY ECONOMY?
 Why the question of investor friendly India?
• Poor economic growth of India pre 1991 economic liberalization and license
Raj.
• Long lead time for process and approvals
• Red tapism of Indian bureaucracy 
• Corruption
• Lack of resources
• Lack of skill labour

GDP = Consumption Expenditure (60% appx.)+ Investment Expenditure

(32.5%)+Government Expenditure (12.5%) + Export – Import (-5%)
 NATION WISE FDI INFLOW FOR YEAR 2017-18
Slide 9

• Countries having negative rate of return are inclined towards investing outside.
• Corporations of countries which are expanding aggressively exploring opportunity outside the country.
• For creating and maintaining warm bilateral ties and relations, countries are investing into each other.
 Current problems with Investment in India

Economic Lack of export

slowdown promotion

Less appetite Sudden heavy

for aggressive reforms
privatization

Rigid Labour
law
 Global FDI scenario

Global FDI flows decreased by 20% in the first half of 2019 to USD 572 billion. They
dropped by 5% in Q1 2019 and by 42% in Q2.
3
 FDI Scenario in India
Slide 8

• The annual growth in gross FDI and FDI equity inflows has fallen into single digits since 2016-17 with the latter
registering a negative growth in 2018-19.
• Foreign direct investment (FDI) in India seems to be petering out with the inflows growth rate recording a five-year
low of 3 per cent at USD 44.85 billion in 2017-18. The report attributes the sharp decline in FDI flows to the short-
term consequences of tax reform in the US, which compelled US companies to bring home large sums of money that
were held with foreign affiliates.
5
 Government initiatives
Slide 9
For boosting FDI inflow, Government of India has amended FDI policy. On 25 September 2014, Government of
India launched Make in India initiative in which, policy statement on 25 sectors were released with relaxed norms on
each sector. Some of the important sectors are mentioned below.

• Infrastructure- Contributes 10% of India’s GDP has 100% FDI under automatic route in construction sector for cities
and townships.
• Automotive- India is 7th largest producer of vehicles in the world, having 100% FDI in this sector via automatic
route.
• Pharmaceuticals- Indian pharmaceutical market is 3rd largest in terms of volume and 13th largest in terms of value,
is having 74% FDI permitted.
• Railways- 100% FDI is permitted.
• Textile- A contributor of nearly 11% of India's total export has 100% FDI under automatic route.
• Service- FDI in service sector was increased to 46% in 2014–15. In insurance sector, the limit was raised from 26%
to 49% in 2014 8
India at 63(FY 2019) Rank in World Bank’s Doing Business Report
Slide 9
2017 2019
130 100 77 63

2016 2018

Ease in business
Infrastructural development
CENTRAL One nation one tax
GOVERNMENT
Resolving Insolvency
INITIATIVES:-
Getting electricity
Registering Property
Convenient trade across borders 10
Current Scenario AND Recent Development
Slide 9 TOPIC RANK IN 2014 RANK IN 2019 RANK IN 2020

Starting a business 158 137 136

Dealing with construction permits 184 52 27

Getting electricity 137 24 22

Registering property   166 154

Getting Credit 36 22 25

Protecting Minority Investors 7 7 13

Paying Taxes 156 121 115

Trading across Borders 126 80 68

Enforcing Contracts 186 163 163

Resolving Insolvency 137 108 52

Overall  134 77 63
8
 FACTORS FAVORING INVESTMENT IN
Slide 6 INDIA

Political stability Wage Rates Labour skills

+ 2.012%
+ 4,031%

Potential for Scope of the

Exchange rate
growth market

9
Slide 11

THANK YOU