DESTINATION INDIA: WHAT THE FOREIGN INVESTORS MUST KNOW?

Abstract

The image that India carries in the minds of foreign investors is that of an orthodox, corrupt, poor country that is not investor friendly. Most of the international rating agencies have been inadvertently falling into this trap and have failed to objectively assess India vis‐a‐vis investor friendliness. The reality, however, is that India holds tremendous potential for the willing investor and is as investor friendly as any of the so‐called top countries. This paper attempts to offer an objective evaluation of India as an investment destination, and thereby shatter many of the myths about investing in India. There have been governments in power with diametrically opposite ideologies but the policy towards liberalization remains unchanged. The need for growth—and the strategies needed for that growth—is very well understood by Indian policymakers. Some decisions, like the one to go Nuclear, may have political overtones but, by and large, it is the economy that drives governance today.